Markets expect the Fed to cut rates by a further 36 basis points by next December

The US dollar was flat in a liquidity-poor environment. Many traders are still on vacation during the holiday season and there are no important data releases on the U.S. economic data calendar on Friday. The dollar index has risen more than 4% since Nov. 5, when Donald Trump won the presidential election.

Trump's proposed policies, including trade tariffs and tax cuts, are expected to push up inflation and limit the Federal Reserve's room to cut interest rates. The market expects the Fed to cut rates a further 36 basis points by December 2025, data show.