The dollar experienced a decline on Friday after investors maintained their expectations for a September Federal Reserve rate cut while monitoring the high-profile Alaska meeting between Donald Trump and Vladimir Putin about Ukraine. The U.S. currency experienced a 0.5% decline against major peers throughout the week despite the positive impact of producer price data that exceeded expectations on Thursday.
The markets continue to predict a 93% probability of a quarter-point interest rate reduction during September according to CME FedWatch while economists anticipate additional rate cuts before the end of the year because of economic growth indicators. Chicago Fed President Austan Goolsbee indicated that services inflation combined with tariffs creates potential stagflation risks.
The euro rose 0.5% to $1.1708 because analysts predict it will gain value if Ukraine ceasefire negotiations advance. The July import price data indicated a positive trend because consumer goods prices increased while retail sales grew due to strong auto sales and promotional activities. The upcoming Jackson Hole symposium stands as the main focus for investors who seek new policy indications.
