The US Dollar fluctuated on Friday, heading toward its fifth consecutive monthly drop, as traders remained cautious amid ongoing uncertainty over trade policies and the nation’s fiscal outlook, while awaiting key inflation data due later in the day.

It was a volatile week for the greenback, which closed lower in the prior session after a federal court temporarily reinstated President Donald Trump’s broadest tariffs, reversing a different court's ruling from the day before that had ordered them to be halted immediately.

On Thursday, Trump expressed hope that the Supreme Court would overturn the trade court’s decision, while officials signalled they might use other presidential powers to enforce the tariffs, Reuters reports.

The ongoing uncertainty surrounding the tariffs has put intense pressure on markets, prompting investors to pull out of US assets in search of safer alternatives, amid concerns that Trump’s unpredictable policies could undermine the resilience and strong performance of US markets.

“The news is making the US a less attractive place for foreign investors to go,” according to Kit Juckes, chief FX strategist at Societe Generale.

This won’t stop money from flowing into the US said Juckes, but investors will be seeking more appealing incentives, like a slightly weaker Dollar or higher yields.

On Friday, the Euro dipped slightly to $1.1331 ahead of Germany’s May inflation figures, while the Swiss Franc held steady at 0.8243 per Dollar.

However, the greenback was on track to post monthly losses against the Swiss Franc, Euro, and Sterling.

Thursday’s jobless claims and GDP data offered little reassurance about the risk of a US economic slowdown. Investors are now turning their attention to the Federal Reserve’s preferred inflation gauge, the personal consumption expenditure (PCE) report, set to be released later on Friday.

Concerns over rising fiscal debt in developed economies, underscored by tepid demand for newly issued long-term bonds in both the US and Japan, have also pressured markets.

Furthermore, the Dollar index, which measures the greenback against a basket of six major currencies, rose 0.3% to 99.56 on Friday. That said, it was on track to notch a 0.10% decline for May, marking its fifth consecutive monthly drop.