Dollar Weakness Pushes EUR/USD to Multi-Month High

The US dollar has seen significant weakness against the euro this week, pushing EUR/USD to its highest level in months. The pair traded near 1.0900 by Friday's close, up roughly 1.5% from the previous week's open.

The dollar's decline was driven by a combination of factors, including softer US economic data and rising expectations for Federal Reserve rate cuts. US retail sales for April came in below expectations, while jobless claims rose more than forecast. This has reinforced market bets that the Fed could begin cutting rates as soon as September.

The European Central Bank's hawkish stance on inflation also contributed to the dollar's weakness. The narrowing yield gap between US and German bonds has made the euro more attractive to investors.