U.S. Dollar Faces Continued Pressure Amid Rate Cut Expectations

The U.S. dollar hovered near its lowest level in three and a half years against the euro and sterling on Friday, driven by growing expectations of deeper rate cuts in the United States. Traders are closely watching trade deals ahead of the July deadline for President Donald Trump's tariffs.

Early European trade saw the euro receive a modest boost following data showing French consumer prices rose more than anticipated in June. By 0808 GMT, the euro climbed 0.2% to $1.17208, nearing its previous session high, while sterling was at $1.3742, just shy of its October 2021 peak.

Market focus remains on U.S. monetary policy, as traders bet on a more dovish Federal Reserve Chair announcement from Trump, raising the likelihood of rate cuts. This, combined with geopolitical developments such as the Israel-Iran conflict ceasefire and upcoming U.S. trade deal deadlines, fosters uncertainty in currency markets.

(With inputs from agencies.)