The dollar was down on Friday morning in Asia as investors bet on slower hikes from the U.S. Federal Reserve.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies fell 0.37% to 105.95 by 1:03 AM ET (5:03 AM GMT).

“Lower yields and positive risk sentiment is (a) tried and trusted recipe for a softer USD, although that weakness has been ‘flattered’ by an outsized rally in the yen,” the National Australia Bank head of FX strategy Ray Attrill wrote in a client note.

He warned, like many analysts have this week, that the market’s “conclusion that the Fed has lost some of its hawkishness (is) debatable”.

The USD/JPY pair fell 0.77% to 133.24.

The AUD/USD pair gained 0.29% to 0.7005, and the NZD/USD pair was up 0.36% to 0.6312.

The USD/CNY pair inched down 0.06% to 6.7433, while GBP/USD pair edged up 0.18% to 1.2191.

U.S. Gross Domestic Product (GDP) released on Thursday fell at a 0.9% annual rate in the second quarter, according to the Commerce Department’s advance estimate. The first quarter saw a contraction of 1.6%.

Two consecutive contractionary quarters are widely viewed by economists as signaling a technical recession.

However, in the U.S., the National Bureau of Economic Research is the arbiter of recessions, which it defines as “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators”.

The Fed, on Wednesday, raised interest rates by 75 basis points to 2.25-2.5% as markets expected. Fed Chair Jerome Powell said he did not think the United States was in a recession, based on the strength of the jobs market.

Now markets have priced in the possibility that the Fed will slow the pace of interest rate hikes to half a point at the next meeting in September.

Elsewhere, U.S. President Joe Biden and Chinese President Xi Jinping plan to have an in-person meeting, which would be the first face-to-face one between the men since Biden became president.