The U.S. dollar steadied near 106.94 on Friday, set for a 1% weekly rise—its largest in a month—amid expectations that the Federal Reserve will slow its rate-cutting pace in 2025. Fed officials, including Mary Daly, have hinted at a more cautious easing approach despite an expected 25-basis-point cut on Dec. 18.

The dollar gained 2% against the yen this week, hitting 153.47, as reports suggest the Bank of Japan could hold off on a rate hike to assess wage growth and U.S. policy under Donald Trump. Sterling fell after UK economic activity unexpectedly contracted, deepening concerns over growth prospects. The euro and Swiss franc remained weak after their respective central banks implemented rate cuts earlier this week.