Dollar Woes: Uncertainty and Inflation Impact U.S. Currency

The U.S. dollar weakened on Friday, poised for its fifth consecutive monthly decline, as traders faced ongoing uncertainties tied to trade and economic policies. Investors' focus locked onto an impending inflation report, a pivotal event for financial markets.

Earlier in the week, the greenback experienced significant turbulence. A federal court briefly reinstated sweeping tariffs implemented by President Donald Trump, reversing an earlier trade court ruling that halted them. This legal back-and-forth contributed to market instability, with investors seeking safer assets as concerns over U.S. fiscal health mounted.

Amidst the choppy trading week, the euro and Swiss franc strengthened against the declining dollar. Meanwhile, attention is shifting to emerging market currencies, which posted significant gains. With fiscal health and upcoming trade deadlines at the forefront, markets remain on high alert for further developments that could sway currency movements.

(With inputs from agencies.)