The US dollar fell in European trade on Friday against a basket of major rivals, resuming losses and approaching five-month lows, and on track for the second weekly loss in a row.
The losses are due to concerns about a potential US recession due to mounting trade tensions, while US inflation slowed down, boosting the odds of a Fed rate cut in June.
The Index
The dollar index fell 0.25% today to 103.57, with a session-high at 104.09.
On Thursday, the index dropped 0.25% to 103.57, with a session-high at 104.09.
On Thursday, the index rose 0.25% away from five-month lows at 103.22..
Weekly Trades
The dollar index is down 0.5% so far this week on track for the second weekly loss in a row.
Recession Concerns
Investors are worried about slower US growth after aggressive tariffs on major trade partners, while recent labor data and government layoffs raised more concerns.
US Treasury Secretary Scott Bessent said the economy might slow down as it shifts from government spending to private investments, and reaches a more sustainable balance.
He believes that some tariff levels will always be necessary to fix some economic imbalances around the world and secure more stable supply chains.
President Trump said during a Fox News interview that the US is undergoing a transition phase, with return of wealth to the US through trade and economic policies, including tariffs to boost local industry.
US Rates
Recent data showed US consumer prices slowed down more than expected, bolstering the odds of a Fed rate cut in the summer.
According to the Fedwatch tool, the odds of a Fed 0.25% rate cut in March stood at just 3%.
However, the odds of such a cut in June are much higher at 80%.
www.economies.com