FX.co ★ Dollar Stabilizes Near 6-Month Lows

On Friday, the dollar index fluctuated around 102, maintaining a steady position near recent six-month lows after a significant 1.7% decline the previous day. The market's focus shifted as traders considered the growing trade tensions following China's decision to impose a 34% tariff on all US imports, a direct response to President Trump's tariff announcement on Wednesday. The economic repercussions, including the potential for rising prices, slower economic growth, and the risk of a recession, have intensified expectations for more decisive interest rate cuts by the Federal Reserve. Currently, the probability of four 25 basis point cuts this year has increased to 50%, up from a prediction of three cuts earlier in the week, with the initial cut anticipated in June. The dollar has registered a decline of approximately 1.9% over the course of the week.