SINGAPORE, Nov 15 Reuters The dollar was set for its best week in more than a month on Friday, buoyed by expectations of fewer Federal Reserve rate cuts and the view that Donald Trump39;s policies could further stoke inflation when he assumes office in January.

The greenback hovered near a oneyear high against a basket of currencies at 106.81 and was eyeing a weekly gain of 1.76, which would mark its best performance since September.

Sterling was in turn on track for its steepest weekly fall since January 2023 at roughly 2. It last ticked up 0.06 to 1.2676.

The euro last bought 1.0541, languishing near a oneyear low hit in the previous session. It was headed for a weekly fall of 1.67, also its worst in over a month.

Fed Chair Jerome Powell said on Thursday the central bank does not need to rush to lower interest rates, citing ongoing economic growth, a solid job market and sticky inflation as reasons for caution against easing policy too quickly.

Traders reacted by paring bets of the pace and scale of future U.S. rate cuts, with Fed funds futures now implying just 71 basis points worth of easing by end2025.

Pricing for a 25 bp rate cut next month has also fallen to just 48.3 from 82.5 a day ago, according to the CME FedWatch tool.

Markets just took Powell39;s comments at face value and therefore scaled back expectations for the pace of FOMC cuts, said Carol Kong, a currency strategist at Commonwealth Bank of Australia CBA.

Markets are going to focus on the…