The US dollar fell on Friday in European trade against a basket of major rivals, resuming losses and hitting a three-week low, on track for the heftiest weekly loss in six weeks under extreme selling pressures due to concerns about the US financial stability. 

Now investors await important and crucial remarks by several Fed officials, looking for new clues on the odds of multiple rate cuts this year.

The Index

The dollar index fell 0.75% today to 99.14, the lowest since April 29, with a session-high at 99.94.

On Thursday, the index rose 0.2%, the first profit in four sessions after Trump’s tax bill passed the House of Representatives successfully. 

Weekly Trades

The index is down 1.85% so far this week against a basket of major rivals, heading for the first weekly loss in five weeks, and the heftiest since early April.

The greenback is pressured by increasing concerns about the US financial stability, nudging investors towards safer havens.

It comes after Moody’s decision to cut the US credit rating last week, the investor focus turned to the massive US debt reaching $36 trillion, and to Trump’s new tax reform bill, which would add trillions to this burden.

Trump described the legislation as a “big beautiful bill”, and has already passed the House of Representatives and headed to the Senate where it’s expected to face months of discussions and changes.

US Rates

US President Donald Trump once again called on the Federal Reserve to cut interest rates in posts on his social media accounts.

Atlanta Fed President Raphael Bostic said earlier this week that he’s leaning towards a single interest rate cut this year.

According to the Fedwatch tool, the odds of a Fed 0.25% interest rate cut in June stood at just 8%.

The odds of a 0.25%% Fed rate cut in July stood at 37%.

Traders now expect 50 basis points overall of Fed rate cuts this year, likely starting in October.

Gold prices rose in European trade on Friday, resuming gains after a short hiatus yesterday and heading for a weekly profit as the dollar dipped against a basket of major rivals.

It comes after the US credit rating downgrade, which renewed concerns about the US financial stability and raised the challenges facing US policymakers.

The Price

Gold prices rose 1.2% today to $3334 an ounce, with a session-low at $3287.

On Thursday, gold lost 0.6%, the first loss in four days on profit-taking away from a two-week high at $3345 an ounce.

Weekly Trades

This week, gold prices are up 4% so far, on track for the second weekly profit in three weeks, and the largest such profit in six.

US Dollar

The US dollar index fell  0.5% on Friday on track for a two-week trough at 99.34 against a basket of major rivals. 

The greenback is pressured by increasing concerns about the US financial stability, nudging investors towards safer havens.

It comes after Moody’s decision to cut the US credit rating last week, the investor focus turned to the massive US debt reaching $36 trillion, and to Trump’s new tax reform bill, which would add trillions to this burden.

Trump described the legislation as a “big beautiful bill”, and has already passed the House of Representatives and headed to the Senate where it’s expected to face months of discussions and changes.

US Rates

US President Donald Trump once again called on the Federal Reserve to cut interest rates in posts on his social media accounts.

Atlanta Fed President Raphael Bostic said earlier this week that he’s leaning towards a single interest rate cut this year.

According to the Fedwatch tool, the odds of a Fed 0.25% interest rate cut in June stood at just 8%.

The odds of a 0.25%% Fed rate cut in July stood at 37%.

Traders now expect 50 basis points overall of Fed rate cuts this year, likely starting in October.

SPDR

Gold holdings at the SPDR Gold Trust rose 4.01 tons yesterday to a total of 923.89 tons, the highest in a week.

Sterling rose in European trade on Friday against a basket of major rivals, extending gains for the fifth straight session against the dollar and about to mark three-year highs.

The pound is heading for a huge weekly profit as the dollar faces heavy selling pressures, and after data that showed increasing inflationary pressures on the Bank of England policymakers, hurting the odds of a June rate cut.

The Price

The GBP/USD rose 0.25% today to $1.3449, with a session-low at $1.3415.

The pound rose less than 0.1% on Wednesday against the dollar, the fourth profit in a row, scaling a three-year peak at $1.3469.

Weekly Trades

The pound is up 1.3% so far against the dollar this week, on track for the biggest weekly profit since mid April.

US Dollar

The US dollar index fell  0.25% on Friday on track for a two-week trough at 99.34 against a basket of major rivals. 

The greenback is pressured by increasing concerns about the US financial stability, nudging investors towards safer havens.

It comes after Moody’s decision to cut the US credit rating last week, the investor focus turned to the massive US debt reaching $36 trillion, and to Trump’s new tax reform bill, which would add trillions to this burden.

UK Rates

UK consumer prices rose 3.5% y/y in April, up from 2.6% in March, and passed estimates of a 3.3% rise.

The data renewed inflationary pressures on the Bank of England policymakers, and tanked the odds of a June 0.25% rate cut from 25% to 15%.

Now traders await important UK data on various sectors to gather even more clues on the second quarter performance.

The UK GDP grew by a brisk 0.7% in the first quarter, beating estimates of a 0.6% rise and compared to the 0.1% growth rate in the last quarter of 2024.

The Japanese yen rose in Asian trade on Friday against a basket of major rivals, resuming gains against the US dollar and approaching a two-week high and a weekly profit on strong haven demand amid concerns about US financial stability.

Earlier Tokyo data showed inflation rose to a two-year peak, showcasing the inflationary pressures facing the Bank of Japan’s policymakers, and bolstering the odds of a Japanese rate hike in June.

The Price

The USD/JPY fell 0.% today to 143.44 yen per dollar, with a session-high at 144.07.

The yen lost 0.25% on Thursday against the greenback, snapping a seven-day winning streak, the longest since April 2021 on profit-taking away from a two-week high at 142.80.

Weekly Trades 

The yen is up 1.5% so far this week against the dollar, on track for the first weekly profit in five weeks.

US Financial Stability

After Moody’s decision to cut the US credit rating last week, the investor focus turned to the massive US debt reaching $36 trillion, and to Trump’s new tax reform bill, which would add trillions to this burden.

Trump described the legislation as a “big beautiful bill”, and has already passed the House of Representatives and headed to the Senate where it’s expected to face months of discussions and changes.

Inflation

Earlier Japanese data showed consumer prices rose 3.5% in April, the highest pace since early y023, beating estimates of 3.4%, and up from 3.2% in March.

Following the data, the odds of a Japanese 0.25% interest rate hike in June rose from 30% to 40%.

Bank of Japan Deputy Governor Shinichi Uchida said the bank will continue to raise interest rates if the economy recovers from the negative impact of US tariffs, however he still cautioned that the economic outlook remains highly uncertain.

Now traders await important Japanese data on inflation, unemployment, and wages to gather more clues.