The dollar index hovered near 99.5 on Friday, a two-week low, pressured by Trump’s proposed 50% tariffs on EU goods and a U.S. credit downgrade tied to deficit concerns. The euro hit $1.137 before easing to $1.13, set for weekly gains. Germany’s GDP revision and strong Ifo lifted sentiment, but weak PMIs capped upside.

Beijing and Washington continued high-level diplomatic engagement with a phone call on Thursday between U.S. Deputy Secretary of State Christopher Landau and China’s Executive Vice Foreign Minister Ma Zhaoxu. According to the U.S. State Department, the two officials exchanged views on a broad range of mutually significant issues, though no specific details were disclosed. Both parties underscored the importance of the bilateral relationship and agreed to maintain open lines of communication.

The U.S. labor market showed mixed signals last week, as new unemployment claims declined modestly, but the number of continuing benefit recipients climbed to its highest level since late 2021.