The Dollar weakened on Thursday amid growing expectations of Federal Reserve interest rate cuts this year and ongoing uncertainty surrounding trade tensions.

On Wednesday, Trump signalled a willingness to extend the 8^th July deadline for finalising trade negotiations with various countries. However, he also mentioned that the US would soon begin sending letters outlining proposed trade deal terms to numerous nations, giving them the option to accept or decline.

Trump’s comments came after US Treasury Secretary Scott Bessent indicated that the administration might grant extensions beyond the July trade deadline for countries negotiating in good faith, Reuters reports.

Ongoing uncertainty about the future of global trade, combined with the lack of specifics in a recent framework agreement between the US and China, weighed on market sentiment and added to the pressure on the Dollar, prompting more investors to sell.

The widespread decline in the US Dollar on Thursday lifted the Euro to a seven-week high earlier in the session, though it later trimmed gains to trade at $1.1515.

The British Pound rose 0.34% to $1.3583, while the Japanese Yen strengthened by 0.4%, reaching 143.95 per Dollar.

Meanwhile, the Dollar index, which measures the greenback against a basket of major currencies, dropped to its lowest level since 22^nd April, hitting 98.284.

“It's hard to tell whether there is a masterplan behind this, but common sense would suggest that President Trump is trying to create a level of urgency in terms of trade negotiations,” stated Rodrigo Catril, senior currency strategist at National Australia Bank.

“I think the market, in terms of the size of the moves, is becoming a little bit more sanguine about what this all means... the market is also very wary that the picture could change quite dramatically in a week's time or two weeks' time.”

In other currency moves, the Dollar declined 0.44% against the Swiss Franc, reaching 0.8169.

The Australian Dollar slipped 0.12% to $0.6496 amid weakening risk sentiment, while the New Zealand Dollar edged up 0.1% to $0.6033.

Adding to the downward pressure on the greenback was Wednesday’s data showing US consumer prices rose less than anticipated in May, prompting traders to increase their bets on a possible Federal Reserve rate cut as early as September.

Markets are now looking to Thursday’s producer price index (PPI) data as the next key indicator.

The onshore Yuan gained 0.2% to 7.1810 per Dollar, though its advance was limited by the fragile nature of the current truce in the US-China trade dispute.

“Full details have not been published, and it remains unclear if the talks brought the two largest economies closer to productive cooperation,” stated Mantas Vanagas, senior economist at Westpac.