The Dollar Index gained 0.1% to 99.870, on course to gain around 2.5% this week, its best weekly performance since September 2022

The U.S. dollar rose Friday, heading for its best week in almost three years as traders react to a relatively hawkish stance by the Federal Reserve, healthy economic data and the imposition of new U.S. tariffs on a series of trading partners.

At 08:30 GMT, the Dollar Index, which tracks the greenback against a basket of six other currencies, gained 0.1% to 99.870, on course to gain around 2.5% this week, its best weekly performance since September 2022.

U.S. President Donald Trump signed an executive order on Thursday night lifting tariffs to as much as 50% on dozens of countries, with the levies now set to activate at 12:01 am on August 7.

Major industrialized economies such as the European Union, Japan and South Korea will face duties of 15%, while even higher tariffs are set to be slapped on other nations, including 50% levies on Brazil.

Trump also increased tariffs on Canada to 35% for goods that do not comply with the U.S.-Mexico-Canada Agreement, which was signed during Trump’s first term.

However, further dollar gains have been limited Friday as traders await the release of the widely-watched monthly jobs report, as they search for clues over when the Federal Reserve will next cut rates, if at all.

Fed Chair Jay Powell has placed greater emphasis on the unemployment rate, which is expected to rise marginally from 4.1% to 4.2% – hardly enough to sound the alarm on the jobs market, said analysts at ING, in a note.

They said: We expect a 115k, 4.2% scenario as only marginally positive for the dollar. After this week’s big run, it could simply lead to some consolidation.