Dollar Declines, Erasing 5-Week Gains Pressured by US Financial Conditions

The US dollar fell and was on track to post its first weekly loss in five weeks against the euro and yen, as concerns about a deterioration in the US public finances spurred investors to safe havens.

The euro rose 0.36% to $1.132, and is expected to post a 1.2% gain for the week after four consecutive weeks of losses, as the suspension of tariffs strengthened the dollar in recent weeks, according to Reuters.

The euro is expected to rise 9% in 2025, thanks to market turmoil caused by the tariffs, as investors flee the dollar in search of safer bets.

The yen rose to 143.47 yen per dollar, heading for a 1.5% gain for the week, after core inflation in Japan accelerated at its fastest annual pace in more than two years in April, increasing the likelihood of another interest rate hike by the end of the year. The dollar index, which compares the US currency to six other currencies, including the yen and the euro, is expected to fall 1.35 percent this week. It fell 0.3 percent to 99.614.