The US dollar fell to near 3-⅕ year lows against both the euro and sterling on Friday as traders bet on multiple Fed rate cuts this year, while waiting for the results of US trade negotiations with major partners before the July deadline.

The euro was boosted after recent French data showed consumer prices rose more than expected in June.

The euro rose 0.2% to $1.17208, approaching September 2021 highs at $1.1745.

Sterling traded at $1.3742, slightly off October 2021 highs at $1.37701.

Trump Versus Powell

Trump once again criticized Powell for refusing to cut interest rates, and asserting Powell will leave his position soon.

Powell told the Senate of the need to be cautious with monetary policies, as Trumps tariffs represent a risk to inflation.

Powell warned that while Trumps tariffs could cause a one-time hike in prices, the risk of sustained inflation is big enough to force the Fed into more caution about rate cuts.

The Wall Street Journal reports that Trump is considering choosing and announcing his successor by September or October as a way to undermine him.

Sixth Straight Monthly Loss

The US dollar index is heading for a 2.3% loss in June, the lowest since March 2022, and marking the sixth monthly loss in a row.

The dollar index is down 10% so far this year, but it faces even more pressures as the Federal Reserve gears up towards multiple interest rate cuts this year.

Otherwise, a weaker dollar pushed the Aussie to a seven-month peak at $0.6564 on Thursday.

Other emerging currencies also surged, with the Taiwanese dollar up to April 2022 highs.

Fed Rates

Fed official Michelle Bowman said on Monday that the time for an interest rate cut is approaching amid potential risks to the labor market.

The odds of a Fed 0.25% rate cut at the July meeting rose from 15% to 23% according to the Fedwatch tool.

The odds of a Fed September rate cut rose from 68% to 78%.

The bonds market is mostly stable, with two-year US treasury yields down 0.01% to 3.77%.