USD weakens slightly as equities decline ahead of US Independence Day

The US dollar traded modestly lower during European morning hours on July 4th, with major pairs showing limited movement ahead of the US holiday closure. EUR/USD edged higher while equity markets retreated, suggesting a mild risk-off sentiment despite the dollar's weakness. Trading volumes remained thin as US markets prepared for Independence Day celebrations, limiting significant price action across major currency pairs. The subdued activity reflects typical pre-holiday positioning, with traders reluctant to establish new positions before the long weekend. Market participants are already looking ahead to next week's economic calendar, which includes important US inflation data and potential trade policy announcements. Technical indicators suggest the dollar's near-term weakness could extend if upcoming data disappoints, though holiday-thinned liquidity may exaggerate any moves. Traders should expect potentially choppy conditions when markets reopen next week.