Economic Signals Weigh Down Dollar Amid Global Trade Tensions

The dollar is experiencing a weekly loss due to U.S. economic fragility and stalled trade negotiations. Meanwhile, currencies like the euro and Australian dollar gained. Markets await the U.S. nonfarm payrolls report for further direction. Concerns over U.S. trade talks continue to pressure the dollar.

The dollar is bracing for a weekly decline as indications of fragility within the U.S. economy and stalled trade negotiations impede its trajectory. Despite a looming deadline, diplomacy between Washington and its trading partners has made scant progress.

All eyes turn to the forthcoming U.S. nonfarm payrolls report, poised to offer critical insights following a week of lackluster economic data, highlighting the detrimental effects of President Trump's trade tariffs. Currencies made initial gains against the dollar, fueled by optimism from a Trump-Xi phone call, but reversed some advances shortly after.

The euro surged after the European Central Bank's hawkish stance post-rate cut, peaking at a 1-1/2-month high, while the dollar weakened, weighed down by U.S. trade uncertainties and fears of a flagging labor market. The global currency market remains on edge pending the release of U.S. job data.

(With inputs from agencies.)