On Friday, the dollar gained against the euro after European inflation hit a record high and US consumer spending rose faster than expected. The dollar was, however, on track for its greatest quarterly gain since 2015, it was headed for its first weekly plunge in three weeks.

Sterling dropped against the dollar after three sessions of gains followed wild declines on concerns about Britain’s plan to cut taxes and pay for it with more borrowing. Data on Friday indicated euro zone inflation zoomed past forecasts to hit 10.0 per cent in September, reinforcing expectations for another jumbo European Central Bank (ECB) rate hike next month.

The pound, after hitting USD 1.1235, was last down 0.06 per cent on the day at USD 1.1112. The euro was down 0.3 per cent at USD 0.9782. The dollar was up 0.13 per cent against a basket of major currencies. It was on track for its biggest quarterly gain since the first quarter of 2015, recently showing a 7.3 per cent gain.

However, on a weekly basis, the index was set for its first decline in three, last down 0.73%. The US Federal Reserve, which has raised borrowing costs faster in 2022 since the 1980s, got one less reason to slow down.