Dollar set for weekly loss; sterling weakens after GDP drop

The dollar is showing a weakening trend this week and is set to face losses as it approaches the weekend. A contributing factor has been recent U.S. economic indicators that fell below expectations. The dollar index has declined, and traders are closely watching the potential for rate hikes at the upcoming FOMC meeting. On the other hand, the pound has also weakened following disappointing GDP data, indicating a slowdown in the UK economy. This has created challenging conditions for the pound as market participants exhibit a risk-off sentiment, shifting towards safer assets. Given this backdrop, the movements of both the dollar and the pound should be monitored closely. The dollar could react sensitively to upcoming economic indicators and central bank announcements, while the pound may be reassessed in light of the UK's monetary policy decisions. Traders should stay alert to forthcoming economic data releases, particularly U.S. employment statistics and UK inflation rates, which are likely to attract significant attention.