U.S. dollar was set for a second straight weekly decline as easing Middle East tensions reduced demand for safe-haven assets. A ceasefire between Lebanon and Israel and hopes of a U.S.-Iran deal lifted sentiment, pushing the euro and pound back near pre-war levels. Analysts noted the dollar outlook remains bearish longer term, though near-term moves may stay uncertain.
Markets remained focused on inflation risks from elevated energy prices and central bank responses. Treasury yields eased, while expectations firmed that the Federal Reserve will hold rates steady this year. Stable U.S. labour data and cautious signals from global policymakers reinforced a wait-and-watch stance amid lingering geopolitical and price pressures.