Investing.com – The U.S. dollar traded modest losses on Friday but remained on track for weekly gains as investors reassessed likely Federal Reserve interest rate cuts in the wake of powerful jobs data.

At 04:30 ET (08:30 GMT), the Dollar Index, which tracks the dollar against a basket of six other currencies, was trading 0.2% lower at 102,594.

The index is on track to gain 0.4% this week, building on last week’s gain of more than 2%.

PPI data next

The dollar has been in demand since last week’s powerful report, with investors largely ruling out the chance of another significant rate cut at the next meeting.

While Thursday’s gain raised some concerns about the health of the labor market, the rally reminded traders that inflation may still be a problem.

data will be released later in the session and is likely to show modest gains, although there is some degree of uncertainty due to slightly higher-than-expected consumer inflation in September.

For now, bets on a quarter-point Fed rate cut on November 7 have increased to 83.3% from 80.3% the day before, with the remaining odds of unchanged currency policy, according to CME Group (NASDAQ:) data.

The British economy is returning to growth

In Europe, it rose 0.1% to 1.3068 after data showed the British economy returned to growth in August after two consecutive months of no growth.

rose 0.2% month-on-month in August, largely in line with expectations, and was up 1.0% compared to the previous year.

The UK economy is now on track for its third consecutive quarter of economic growth. The ONS said September GDP data would need to show a monthly decline of 0.3% to 0.6% to achieve a flat quarterly reading, assuming no revision to existing data.

rose 0.1% to 1.0944, after falling to 1.8% in September, the federal statistics office said on Friday, confirming preliminary data.

With inflation in the euro zone’s largest economy currently running below the European Central Bank’s target and economic growth stagnating, the ECB is widely expected to ease policy again next week, after already cutting interest rates twice this year.

“While the case against a rate cut should not be completely dismissed, the ECB will now need to be very bold to maintain it, given that markets and consensus are fully in agreement on a 25 basis point cut,” ING analysts said in note.

Yuan gains before dismissal

fell 0.1% to 148.75, after approaching 150 yen earlier in the week, a level not previously seen since August 2.

fell 0.2% to 7.0672, with the yuan strengthening slightly ahead of the upcoming finance ministry briefing where the government presented fiscal stimulus plans.

Analysts expect Beijing to provide at least 2 trillion yuan ($283 billion) in fiscal support, most of which will go to supporting private consumption.