The dollar was set for its biggest weekly drop in nearly four months as traders lowered Federal Reserve rate hike expectations amid signs the US central bank might slow or even pause its tightening cycle in the second half of the year.
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The dollar index, which measures the greenback against a basket of six peers, fell as low as 101.43 for the first time since April 25. On a weekly basis, it was down 1.3%, its biggest weekly drop since the first week of February.
It hit a nearly two-decade peak above 105 earlier this month but has retreated since then as economic data has weakened. A Citigroup economic surprise index for the United States has fallen to its lowest level since September 2021.
Against the US unit, the single currency euro rose to its highest levels in a month at $1.0765. Sterling GBP was firm at $1.2666.
Better risk sentiment did not help bitcoin however, which slipped 1.62% to around $28,710, continuing this week's gradual decline from the psychologically important $30,000 level.
