Dollar Dips Amid Trade Negotiation Uncertainties and Fed Speculation

The dollar declined as speculation grew over potential Federal Reserve rate cuts following softer U.S. tariff negotiation stances. Euro surged to a seven-week high, amid expectations of reduced ECB rate cuts. Uncertainty remains over U.S.-China trade relations despite a recent London meeting.

The dollar experienced a decline on Thursday, influenced by rising speculation around Federal Reserve rate cuts and signals of a softer approach by U.S. President Donald Trump in ongoing tariff negotiations.

Trump indicated a willingness to extend the July 8 deadline for trade talks, while U.S. Treasury Secretary Scott Bessent suggested possible deadline extensions for countries negotiating in good faith. These developments weakened the dollar, boosting the euro to a seven-week high.

Market participants remained wary, with currency strategist Rodrigo Catril noting the difficulty in predicting Trump's strategy, while economist Mantas Vanagas highlighted lingering uncertainties over U.S.-China trade relations, despite recent talks in London.

(With inputs from agencies.)