The U.S. dollar inched up on Friday even after Federal Reserve officials bolstered expectations of an aggressive rate cut this month.

New York Federal Reserve President John Williams said in a speech that the Fed will “act quickly” to support the economy as “it’s better to take preventative measures than to wait for disaster to unfold.” The New York Fed clarified later that Williams’ speech were not indicative of the central bank’s future moves, but investors still took his remarks as a dovish signal from the central bank.

EUR/USD attempts a bounce from a dip to 1.1255 levels, as soggy Treasury yields offer support, despite broad-based US dollar comeback and below estimates German PPI data.

GBP/USD met fresh supply once again near 1.2555 region amid a broad-based recovery in the US dollar and fresh UK political noise, with the bears now eyeing the 1.2500 support ahead of UK data.

USD/JPY earlier dropped to the month’s low on active risk aversion, but later recovered to the mid-107.00s, as the risk sentiment stabilizes after the NY Fed disavowed President Williams’ comments.

Given the lack of economic data on the cards, the news headlines are likely to keep dominating the market sentiment.

Oil prices jumped on Friday in Asia after the U.S. reportedly shot down an Iranian drone in the Strait of Hormuz in what Trump described as “defensive action”. Meanwhile, indications that the U.S. Federal Reserve will cut rates aggressively to support the economy were also behind Friday’s gains.

Gold prices gained on Friday amid intensifying tension in the Middle East and rising expectations of aggressive Fed easing. Prices of the safe-haven metal were initially under pressure earlier in the day amid strong U.S. data, but rebounded following news that the U.S. military shot down an Iranian drone in the Strait of Hormuz in what President Trump called an act of self-defence.