The Dollar traded near a one-week high against major currencies on Friday, poised to break a five-week losing streak due to strong economic data reducing expectations for aggressive Federal Reserve interest rate cuts.

The Euro remained close to a two-week low against the Dollar as cooling inflation in Germany and Spain strengthened the argument for European Central Bank easing. 

Meanwhile, the Japanese Yen hovered near the closely monitored 145 per Dollar level after weakening on Thursday, following a rise in US Treasury yields. 

The Yen largely ignored Friday's data, which showed core consumer prices in Tokyo increasing by a faster-than-expected 2.4% in August, surpassing the Bank of Japan's 2% target. However, a measure that also excludes energy costs rose by only 1.6%.

Overnight, US data revealed that GDP grew at an annualised rate of 3.0% in Q2, up from the previously reported 2.8%. Economists polled by Reuters had expected the GDP rate to remain unchanged.

“That's been the market mover from the price action overnight, particularly when you look at currencies and US Treasury yields,” stated Rodrigo Catril, senior FX strategist at National Australia Bank, in reference to the GDP figure.

“The takeaway there - the highlight - is that the consumer was stronger than had previously been thought. The exceptionalism of the US was still evident in Q2,” he added.

As it stands, traders now more strongly favour a quarter-point Fed rate reduction on 18th September, with the odds of a 50-basis point cut decreasing to 34% from 38% a day earlier, according to the CME Group's FedWatch Tool.

There was little change for the Dollar index, measuring the currency against six rivals, at 101.40 at the time of writing, after edging up 0.36% on Thursday and reaching a high of 101.58, not seen since 22nd August.

Furthermore, the Dollar eased 0.13% to 144.80 Yen, after increasing to 145.55 overnight, Reuters reports.

The Euro was flat at $1.10755 on Friday and fell to a low of $1.10555 the day before. Whereas Sterling was steady at $1.3165 after easing to $1.3146 overnight.