Dollar's Shaky Path Amid Trade Tensions and Inflation Concerns

The U.S. dollar faltered on Friday, bracing for its fifth consecutive monthly dip as traders faced uncertainty over trade policy and fiscal health, ahead of key inflation reports. It had a turbulent week, ending lower after a court temporarily reinstated President Trump's tariffs, following a trade court's initial block.

President Trump indicated hopes for the Supreme Court to overturn the trade court's decision, with officials preparing to leverage presidential powers to enforce tariffs. This has spurred market unrest, as investors seek safer alternatives due to fears of instability in U.S. markets driven by erratic policies.

The dollar index edged 0.3% higher at 99.58 but was set for its fifth month of decline, the longest since 2017. Meanwhile, emerging market currencies saw a 2% rise, highlighting a shifting currency landscape as worries about fiscal debt and economic downturn loom large.

(With inputs from agencies.)