Investing.com – The U.S. dollar fell on Thursday, struggling to stay afloat after feeble economic data raised expectations for a significant interest rate cut by the Federal Reserve later this month.

At 04:35 ET (08:35 GMT), the dollar index, which tracks the U.S. currency against a basket of six other currencies, was down 0.2% at 101.139, extending a decline from a two-week high of 101.79 reached earlier in the week.

Big Federal Reserve spending cuts coming?

The US dollar struggled for much of the week after disappointing US economic data raised the possibility of a strenuous landing for the world’s largest economy and the US central bank took aggressive action to ease monetary policy.

A survey on Tuesday showed the sector is still in recession and the U.S. economy hit a 3-1/2-year low in July, suggesting the job market is losing momentum.

The rest of the session will feature weekly and monthly data, ahead of the key monthly report on Friday.

Traders now see a 45% chance that the Federal Reserve will cut interest rates by 50 basis points when it meets later this month, and are pricing in cuts of more than 100 basis points by the end of the year.

“Barring a sharp drop in some of today’s numbers, expect DXY to trade in a range of 101-102. However, the multi-week bias is bearish,” analysts at ING said in a note.

Euro and British Pound Up Slightly

In Europe, the rate rose 0.1% to 1.1086, with the common currency helped by a surprise rise in industrial orders in Germany in July.

Orders in Germany rose 2.9% in July from the previous month, data showed on Thursday, a significant improvement over a forecast decline of 1.5%.

In addition, the statistical office revised the June figures upwards, showing an augment of 4.6% compared to the previous result of 3.9%.

Eurozone data for July will be released delayed in the session and is expected to show a slight improvement after a 0.3% decline in the previous month.

“EUR/USD has almost held support at 1.1040 this week and is likely to consolidate just below 1.1100 – barring a negative surprise in US data today,” ING added.

rose 0.1% to 1.3157, with the pair having risen more than 3.5% in the past month, supported by expectations that the Bank of England will keep interest rates high for longer than in the United States.

Yen close to one-month high

In Asia, the yen fell 0.1% to 143.62, helped by demand for safe-haven assets but also by the prospect of imminent interest rate hikes by the Bank of Japan amid a global monetary easing cycle.

The yen rose to a one-month high of 143.20 earlier in the session and is up about 1% so far this week.

fell 0.2% to 7.0999, holding near its highest level in more than a year.