The dollar index hovered around 97.5 on Friday but remained on track for a steep weekly loss as traders weighed evolving trade developments and looked ahead to next week’s Federal Reserve policy meeting. Reports indicate that US and EU officials are nearing a trade agreement that would impose a 15% tariff on most EU goods, mirroring a similar deal recently struck with Japan. On the monetary policy front, the Fed is widely expected to leave interest rates unchanged next week as it monitors the inflationary impact of new tariffs. Meanwhile, President Donald Trump softened his stance on Fed Chair Jerome Powell after a historic visit to the central bank’s headquarters, stating he has no plans to remove him. Markets are currently pricing in 43 basis points of rate cuts by the end of 2025, with reductions expected in both September and December.