Dollar Tumbles as U.S. Treasury Yields Follow Suit

The dollar faced downward pressure on Friday as U.S. Treasury yields declined following a week of unexpected U.S. economic data. This fueled expectations for further Federal Reserve rate cuts this year. Despite this, the greenback is still set for a fourth weekly gain against the euro.

The U.S.-China trade truce briefly boosted the dollar, but weak economic data triggered a drop. Market analysts suggest potential further weakening if Fed rate cut chances increase. Current market conditions reflect 59 basis points of easing by year-end and a 40% chance of a July cut.

The euro gained 0.2% against the dollar, influenced by Germany's investments and concerns about the dollar's safe-haven status. Meanwhile, the dollar showed varied performance against the yen and South Korean won, underpinned by global exchange discussions.

(With inputs from agencies.)