The U.S. dollar edged down slightly on Friday, with the euro also declining, both on track for significant weekly losses due to political unrest in the region.

The dollar index that gauges the greenback versus its major pairs dipped 0.1% at 105.125.

Despite minor declines, the dollar is set to achieve modest gains this week. This follows the Federal Reserve's decision to maintain the funds rate at 5.25%-5.5% and to reduce the anticipated number of rate cuts for the year from three in March to just one.

U.S. consumer and producer prices were lower than anticipated, indicating a reduction in inflationary pressures, while new unemployment benefit claims rose to a 10-month high the earlier week.

Even though the Fed's June dot plot reveals a median expectation of only one rate cut in 2024, Goldman Sachs still predicts the first rate cut in September and a second in December.

EUR/USD slumped 0.3% to 1.0708, Set to record weekly losses of approximately 0.8%, the European region is facing political upheaval following gains by far-right parties in the European Parliament elections, which ended on Sunday.

GBP/USD plunged 0.2% to 1.2729, Poised for modest gains this week, the market reacted to last month's stronger-than-projected inflation figures in Britain, leading investors to delay their expectations for the BoE's rate cuts until late 2024.

USD/JPY advanced by 0.3% to 157.56, after the Bank of Japan let down markets with its policy tightening plans.