Investing.com – The U.S. dollar steadied on Friday, trading near a one-month high after higher-than-expected jobless claims in the U.S. dispelled fears of a looming recession in the world’s largest economy.

At 04:15 ET (09:15 GMT), the dollar index, which tracks the U.S. currency against a basket of six other currencies, was unchanged at 103.007, not far from levels seen ahead of Friday’s jobs data.

Dollar stabilizes after volatile week

Unemployment claims fell by 17,000 to 233,000 in seasonally adjusted terms in the week ending Aug. 3, data showed on Thursday, the biggest drop in about 11 months.

That helped allay fears that the U.S. economy was headed for a strenuous landing and that the Federal Reserve was out of step with changes when it decided not to cut interest rates delayed last month.

“The unusually large reaction to yesterday’s jobless claims data was evidence of the unusually high sensitivity of markets to all kinds of indicators regarding the current macroeconomic situation in the US,” ING analysts said in a recent release.

Next week, attention will turn to the latest consumer price releases as investors await more clues about likely future actions from the Federal Reserve.

“We can reasonably expect the market to react to next week’s core US data to be significant, even with small (up to a second percentage point) deviations from the consensus of 0.2% m/m,” ING added.

According to CME Group’s (NASDAQ:) FedWatch Tool, the odds that the Federal Reserve will cut interest rates by 50 basis points at its next meeting are now just over 50%, with the probability of a 25 basis point cut currently estimated at 46%.

Italian consumer prices fell in July

In Europe, the indicator fell slightly to 1.0917, having reached 1.1009 at the start of the week for the first time since January 2.

The interest rate cuts began in June, and many expect policymakers to agree to another cut as early as September.

fell 0.9% month on month in July and rose 1.6% from a year earlier, suggesting inflationary pressures were contained in the euro zone’s third-largest economy.

rose 0.2% to 1.2768, extending a 0.5% overnight gain that saw it reverse from its lowest level in more than a month.

However, the stock continued to rise this week and posted tiny losses, marking its fourth consecutive week of declines.

USD/JPY remains above lows

In Asia, it fell 0.1% to 147.20, but was trading well above early-week lows of around 141.60.

The change in the yen came after Bank of Japan officials said they would not raise interest rates amid market volatility, softening the central bank’s hawkish stance expressed at a meeting in delayed July.

However, despite this week’s weakness, the yen has continued to gain against the dollar over the past month, especially as global carry trade has begun to retreat.

The yuan fell slightly to 7.1739, with the yuan helped by data showing China’s economy grew more than expected in July and inflation fell slightly less than expected.