The dollar index fell to around 98.2 on Friday and was on track for its biggest weekly decline since July, pressured by intensifying US-China trade tensions, the prolonged US government shutdown, and bets on Federal Reserve interest rate cuts. Credit market risks also weighed on sentiment after two US regional banks disclosed bad loans. China accused the US of deliberately stoking panic over rare earth export controls but signaled willingness to resume trade talks. Meanwhile, the government shutdown entered its third week, delaying key economic data that could guide policy decisions. Fed Governor Christopher Waller said Thursday he supports another rate cut this month amid mounting labor market risks, while Fed Governor Stephen Miran called for more aggressive easing. The Fed’s Beige Book also highlighted emerging economic strains, including rising layoffs and weaker spending among middle- and lower-income households.
