The dollar remains near a three-week high against major currencies as traders await U.S. inflation data that could influence future monetary policy decisions.

Former President Trump has reiterated his calls for significantly lower interest rates, suggesting they should be at 1% or lower, contrasting sharply with the current rate of around 4.25% to 4.50%.

China's economic growth is projected to slow to 5.1% in the second quarter from 5.4% in the first, raising concerns about the need for additional stimulus measures from policymakers.

Federal Reserve Chair Jerome Powell anticipates a rise in inflation during the summer due to tariffs, which may delay any interest rate adjustments until later in the year.

Elevated Treasury yields are supporting the dollar, amid ongoing speculation about the potential departure of Jerome Powell as Fed Chair, especially given criticism from President Trump.

Market analysts warn that if inflation does not meet expectations, there could be increased scrutiny of the Fed's current interest rate stance, with calls for monetary easing.

Fed funds futures indicate traders are expecting up to 50 basis points of rate cuts by the end of the year, with the first possible cut as early as September.

Economists project a rise in inflation to 2.7% for headline inflation and 3.0% for core inflation, up from previous months, fueling speculation about future Fed rate decisions.

The Australian dollar declined from an eight-month high as investors await Chinese GDP data, which is crucial given China's role as Australia's largest trading partner.

Bitcoin is trading at around $120,067 after reaching an all-time high of over $123,000 earlier this week, driven by optimism over upcoming legislative policy changes.

The dollar remains stable against the yen at 147.75, just below its recent high, with the dollar index holding near 98.10, close to its highest since late June.