The dollar index trimmed early gains to trade flat around 102 on Friday, hovering near six-month lows after a sharp 1.7% drop the previous day, as traders weighed escalating trade tensions.

China's finance minister announced a 34% tariff on all US imports, matching the levy imposed by President Trump on Wednesday. Rising concerns over the economic fallout, including higher prices, slower growth, and a potential recession, have fueled speculation of more aggressive Federal Reserve rate cuts.

Traders now see a 50% chance of four 25bps cuts this year, up from three earlier in the week, with the first expected in June. For the week, the dollar is down about 1.9%.

Source: Trading Economics