Dollar's Volatile Week Amid Trump Inauguration and BOJ Rate Hike Speculation

The dollar steadied on Friday but was on track to end the week lower after a six-week winning streak. Investors' focus shifted to Donald Trump's presidential inauguration and the Bank of Japan's possible rate hike. Market expectations include further Fed rate cuts, impacting dollar strength amidst global economic developments.

The dollar experienced a fluctuation this week as it steadied on Friday yet aimed to close the week lower after having a six-week winning streak. Market participants shifted their gaze towards Donald Trump's imminent presidential inauguration and the corresponding policies of the incoming administration.

Meanwhile, the yen seemed set for its most robust weekly performance in over a month, as it climbed by more than 1% against the dollar this week. This upward movement came as anticipation grew concerning the Bank of Japan's possibly impending interest rate hike.

On the Treasury yields front, concerns eased following softer U.S. inflation data and Federal Reserve Governor Christopher Waller's comments suggesting potential interest rate cuts. As investors await Trump's policy directions and economic indicators, the dollar remains under pressure amid these global financial shifts.

(With inputs from agencies.)