REUTERS, New York

The US dollar was heading for its worst weekly performance since late July on Friday as traders increased bets that the Federal Reserve will cut rates again next month.

The dollar has dropped this week as traders conclude that weakening labor data will lead to more rate cuts, even as many Fed policymakers express concern about still-elevated inflation.

“It feels like with the post-shutdown run of releases, it’s generally been soft ... the data overall definitely leaned towards a cut,” said Eric Theoret, FX strategist at Scotiabank in Toronto.

The US federal government is releasing a backlog of economic data after reopening from a record 43-day shutdown.

Fed funds futures traders are pricing in 87 percent odds of a cut at the conclusion of the Fed’s December 9-10 meeting, up from 71 percent a