LONDON—The dollar was on track on Friday for one of its steepest weekly falls versus major currencies this year, while the yen strengthened sharply to trade below 150 per dollar as concerns grow about the worsening global economic outlook. Cooler-than-expected U.S. inflation data on Tuesday helped reset market expectations for how quickly the U.S. Federal Reserve will cut rates and has weighed on the dollar, which is on track for a 1.6 percent weekly fall—its biggest since mid-July. The dollar index was down 0.3 percent on the day at 104.1, while the euro edged up 0.1 percent to $1.08665 after data confirmed year-on-year inflation in the eurozone slowed sharply in October. The yen—which has been punished broadly by dollar strength—broke the 150 mark versus the dollar for the first time in nearly two weeks. The dollar lost as much as 1 percent versus the Japanese currency and was last down 0.9 percent at 149.320 yen. Lee Hardman, currency analyst at MUFG, said the yen’s strength reflected the fact that “contracting growth concerns are rising” globally, adding that Japanese terms of trade were less impacted by falling energy prices. Weaker-than-expected retail sales figures in Britain on Friday added to a slew of negative indicators this week, with the pound edging up 0.2 percent to $1.2435. Sluggish data globally has raised concerns about economic prospects, but also suggests central banks may be winning in their fight against soaring prices. Futures markets were pricing in about 100 basis points (bps) of cuts to U.S. interest rates next year on Friday, moves that have contributed to dollar weakness. Currency analysts at ING said in a note that the dollar had entered a “consolidative phase” and that a “clear and immediate catalyst” for further euro gains in particular was not obvious. Money markets have also nearly fully priced 100 bps of rate cuts in the euro zone next year. Nonetheless, European Central Bank (ECB) policymaker Robert Holzmann said on Friday the bloc must stand ready to raise interest rates again if necessary. ECB President Christine Lagarde said earlier in the day that the EU needs a capital markets union, adding that neither heavily indebted governments nor banks can come up with the money needed to make the bloc more productive and independent. U.S. housing starts data is due later on Friday, with several Federal Reserve policymakers also due to make public comments. In cryptocurrencies, bitcoin is set to snap a four-week winning streak with a 1.9 percent weekly fall to $36,408.