Dollar Feels the Heat of Fed’s Rate Outlook

LONDON—The dollar headed for its biggest weekly drop in five months on Friday as the prospect of rate cuts from the Federal Reserve against a tough line from central banks in Europe on monetary policy fed weekly gains in the euro and the pound. The Bank of Japan is the last of the major central banks to meet this month and the question among traders and investors is whether or not the BOJ will signal its intention to ditch its policy of keeping interest rates at rock-bottom next week. In an action-packed week for central banks, traders found more clarity on when interest rate cuts were likely after Federal Reserve Chair Jerome…