US Dollar Index holds positive ground above 98.00 on report Waller favored to Chiar Fed

• US Dollar Index trades on a positive note near 98.15 in Friday's Asian session. 
• The DXY gains ground on the report that Waller is favored to Chair Fed. 
• A dovish Fed outlook and rising bets of Fed rate cuts might weigh on the US Dollar. 

The US Dollar Index (DXY), an index of the value of the US Dollar (USD) measured against a basket of six world currencies, edges higher to around 98.15, snapping the two-day losing streak during the Asian trading hours on Friday. The preliminary reading of the University of Michigan's Inflation Expectations report for August will be the highlight later on Friday. 

The DXY gains traction after Federal Reserve (Fed) Governor Christopher Waller has reportedly emerged as the top contender to succeed embattled Fed Chair Jerome Powell. Waller argued the US central bank can "look through" the inflation impact of tariffs as transitory. He favored a quarter-point cut last week when his colleagues voted to hold rates steady.

Meanwhile, Atlanta Fed President Raphael Bostic said he still views one interest-rate cut as likely this year, adding that there are reasons to be skeptical that the inflationary effects from tariffs will be temporary.

Traders increased their bets that the Fed would cut rates in September after data showed employment growth was substantially weaker in the three months through July and consumer spending is softening. According to the CME FedWatch tool, markets have priced in nearly a 94% possibility of a 25 basis point (bps) cut at the September meeting, up from 48% a week ago. Rising expectations of Fed rate reductions might undermine the Greenback in the near term. 

Data by the US Department of Labour (DOL) on Thursday showed that the Initial Jobless Claims for the week ending August 2 increased to 226K. This figure came in above the market consensus of 221K and was higher than the previous week's 218K.