Euro declined in European trade for a second session against dollar, almost hitting two-month lows ahead of European Central Bank President Christine Lagarde's speech later today ahead of the European Parliament. 

Dollar extended its gains to 11-week highs on alternative investment demand amid bets the Federal Reserve will maintain high US interest rates for an extended period of time. 

EUR/USD fell 0.3% to 1.0683, with a session-high at 1.0711, after losing 0.5% on Friday, resuming losses after a recovery from two-month lows at 1.0635. 

Euro lost 0.2% last week against dollar, the fourth weekly loss in a row, and the longest such streak of weekly losses this year amid concerns about a gap in interest rates between Europe and the US. 

Lagarde 

ECB President Christine Lagarde is due to testify before the Committee on Economic and Monetary Affairs of the European Parliament, in Brussels.

Lagarde said on Thursday that inflation in the euro zone remains too high and will likely remain so for a long period of time. 

Lagarde added there's still no proof that core inflation has peaked yet, with still some space available for policy tightening and interest rate hies in Europe.

European Rates

Recent inflation data showed European consumer prices fell to 15-month lows in May, reducing inflationary pressures on ECB policymakers. 

The Dollar

The dollar index rose 0.3% today for another session, almost hitting 11-week highs at 104.69 against a basket of major rivals.

US non-farm payrolls surged past estimates in May, however wages were slower than expected and unemployment rose from recent 53-year lows, paving the way for the Fed to snap its policy tightening path. 

Several Fed officials indeed said recently they'd prefer the Fed to stop its current path of policy tightening and conduct deeper studies on US economic conditions.

Bets on a US Fed rate hike now moved from June to July, with a 55% likelihood of a 0.25% rate hike at the July meeting. 

US stock indices rose on Friday after Congress passed the bill raising the debt ceiling level, and following positive employment data. 

Employment Data

Earlier data showed the US economy added 339 thousand new jobs in May, easily blistering through estimates of 193 thousand. 

Unemployment however rose to 3.7% last month ,while analysts expected a drop to 3.4%. 

US Debt Ceiling

Earlier today, US Senate passed the bill raising the US debt ceiling in order to avoid a catastrophic debt default. 

US President Joe Biden lauded the successful vote to raise the debt ceiling until 2025, noting it's a big victory for the economy and US people. 

On trading, Dow Jones rose 1.5% as of 15:49 GMT to 33,543, while S&P 500 rose 1.1%, or 48 points to 4,269, as NASDAQ added 0.8%, or 109 points to 13,203. 

Global oil prices rose on Friday away from four-week lows ahead of OPEC+ meeting in the weekend.

Prices are buoyed by a weaker dollar against major rivals, making dollar-denominated commodities cheaper to holders of other currencies. 

Concerns about US financial default have subsided as well after Congress approved a bill to raise the US debt ceiling. 

Global Oil Prices

US crude rose 2.05% to $71.55 a barrel, while Brent climbed 2.1% to $75.77 a barrel, with a session-low at $74.23. 

US crude rose 3.8% on Thursday, the first profit in four days away from four-week lows at $67.08. 

Brent rallied 2.9%, snapping a three-day losing streak when it touched May 4 lows at $71.54 a barrel. 

OPEC+ Meeting

OPEC members are meeting in Vienna during the weekend with allies such as Russia to discuss fresh developments in the market and take decision on current production policies. 

Signals about a new production cut remain mixed so far, with bank analysts believing it's unlikely for the organization to enact new production cuts. 

The dollar index fell 0.2% on Friday, sharpening losses for another session and plumbing one-week lows at 103.38 against a basket of major rivals.

Dollar is also backing off 11-week highs as risk appetite improves in the markets after the passage of the bill raising US debt ceiling on Congress.

Fed Remarks and Rates

A batch of recent remarks by several Fed officials were rather bearish with signals of ceasing rate hikes in June.

Such remarks caused pricing for a 0.25% Fed rate hike in June to collapse from 65% to just 23%.

Dollar declined in European trade for another session, plumbing one-week trough off 11-week highs after Congress passed the bill to raise the US debt ceiling. 

Dollar is on track for the first weekly loss in a month following more bearish remarks by Fed officials, which caused a reversal in pricing for US interest rates in June. 

Now investors await a batch of crucial US payrolls data to better gauge the path ahead for monetary policies.

The Index

The dollar index fell 0.2% to 103.38, the lowest in a week, with a session-high at 103.59, after losing 0.7% yesterday, the largest loss since May 3 on profit-taking off 11-week highs at 104.69 and amid improving risk appetite. 

Recent data showed US manufacturing sector tumbled in May, renewing concerns about US recession during the second quarter.

The dollar index remains down nearly 0.8% this week, on track for the first weekly loss in a month. 

US Debt Ceiling 

Congress passed the bill raising the US debt ceiling,  this week with all that's left now is President Joe Biden's signature.

Such a bill will raise the debt ceiling until January 1st, 2025, and will put aside such dangerous political risks for until after the 2024 presidential elections.

Fed Remarks

Federal Reserve member Philip Jefferson said it's likely the Fed will maintain rates unchanged at the June meeting.

Philadelphia Fed President Philip Jefferson said he prefers for the Federal Reserve to stop raising interest rates at the next meeting as rates approach neutrality.

Such remarks caused pricing for a 0.25% Fed rate hike in June to collapse from 65% to just 23%. 

US Jobs

Now investors await crucial US jobs data to better gauge the path ahead for monetary policies.