Dollar Slump: U.S. Rate Cuts and Tariff Uncertainty Ripple Markets

On Friday, the dollar hovered near its lowest level in over three years against the euro and sterling. Market participants are betting on deeper U.S. rate cuts as they await trade deals ahead of a looming July deadline for President Trump's tariffs.

This week, U.S. monetary policy took center stage. Speculation surrounds Trump's potential early announcement of a new Federal Reserve Chair, thought to be more dovish than current Chair Jerome Powell, whose dovish stance this week before Congress heightened rate cut expectations.

The dollar index languished near a multi-year low, with some speculating a new appointment could weaken Powell's influence, affecting the currency further. Amidst tariff negotiations, the EU and U.S. discuss quick trade deals, while the U.S.-China agreement on rare earths signals glimmers of progress.

(With inputs from agencies.)