NEW YORK (Reuters) -The U.S. 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.

An overnight outage due to a cooling issue at CME Group’s CyrusOne data centres, meanwhile, halted trade on its widely-used currency platform and in stock and commodity futures. By 1335 GMT, trading had resumed, after having been knocked out for over 11 hours, according to LSEG data.

The dollar has tumbled this week as traders conclude that weakening labor data will lead to more Fed 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.

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

Currency markets shrug off CME outage

After weeks of heavy jawboning, Fed officials will enter into a blackout period on Saturday ahead of the meeting.

The dollar index, which measures the greenback’s strength against a basket of six major peers, was last trading up 0.06% to 99.59, recovering some ground. But it remains on track for a 0.61% weekly loss, its largest since July 21.

So far currency markets remain relatively unfazed by the CME’s overnight outage, which came in already light trading volumes after Thursday’s U.S. Thanksgiving Day holiday.

“Liquidity remains thin given that most participants executed month-end trades ahead of yesterday’s Thanksgiving holiday, and most major pairs are seeing choppy, but range-bound trading action with technical levels holding firm,” said Karl Schamotta, chief market strategist at Corpay in Toronto.

“Markets could hit some turbulence later this morning if benchmark prices remain muddled, but it looks as if that’s a relatively unlikely scenario,” he added.

The euro fell 0.09% to $1.1585. The Japanese yen strengthened 0.03% against the greenback to 156.25 per dollar.

Anticipation ahead of BoJ meeting

Bank of Japan governor Kazuo Ueda is due to speak on Monday and traders will focus on whether he signals a likely rate increase at the BOJ’s December meeting, which could continue to lift the currency.

“There’s obviously a lot of anticipation around the Bank of Japan meeting in December. Will they hike rates? Will they not hike rates? And up until now, Ueda has been reasonably non-committal/dovish and hasn’t really signaled a December hike yet,” said James Lord, head of FX and emerging market strategy at Morgan Stanley.

“But with dollar yen at these levels and the fiscal package that has been announced by the government, there’s a possibility that we will see a rate hike in the December meeting,” Lord said.

Japanese Prime Minister Sanae Takaichi’s government on Friday finalised a $117 billion supplementary budget for this financial year to fund a massive stimulus package, most of which will be financed through new debt issuance.

Sterling fell 0.21% to $1.3211 though it was heading for its best weekly performance since early August, with a gain of 0.85%, after British finance minister Rachel Reeves revealed her long-awaited budget earlier this week.

Reeves fought back on Thursday against criticism of the government’s spending plans, which will fund extra welfare spending by raising the country’s tax burden to a post-World War Two high.

The Canadian dollar extended gains after data showed that Canada’s economy grew at a much faster pace than expected in the third quarter as crude oil exports and government spending boosted economic activity. The loonie was last up0.48% versus the greenback to C$1.396 per dollar.

In cryptocurrencies, bitcoin gained 1.40% to $92,680.

(Reporting by Karen Brettell; Additional reporting by Ozan Ergenay; Editing by Ros Russell)