"We look for the Governing Council to lift its deposit rate from -0.40 percent to -0.20 late in Q3-2019 while keeping its main refinancing rate and its and its marginal lending facility rate unchanged at 0.00 percent and 0.25 percent, respectively".
The single currency slumped almost 1.9 percent on Thursday, its largest one-day fall since Britain's June 2016 Brexit vote shock.
The dollar's index against a basket of six major peers rose on Friday to as high as 95.131, its strongest since November 7, after rallying more than 1% on Thursday. The global crude benchmark, meanwhile, gave up almost all of the gains it saw a day earlier on the possibility that the Organization of the Petroleum Exporting Countries will decide to boost output when members and other major oil producers meet next week.
J.P Morgan Chase's 1.9 percent fall was the biggest drag on the S&P 500.
The main refi rate is now at a record low zero percent and the deposit rate at -0.40 percent. "It doesn't seem like we're at the stage where the hawks are on top of things".
While Friday's tariff decision, on its own, would not have a major macroeconomic impact, the real worry is that it heralds a new era of much greater protectionism, Capital Economics senior USA economist Michael Pearce, said in a note.
The British pound dipped 0.2 percent to $1.3350, unable to hold gains made overnight when it briefly rose to $1.3424 after British Prime Minister Theresa May saw off a rebellion in parliament over amendments to a bill for the country's exit from the European Union next year. Basic resources stocks led the decline with a 1.3 drop following weak data from big metals consumer China.
The Hong Kong Monetary Authority (HKMA) raised the base rate charged through overnight discount window by 25 basis points on Thursday to 2.25 per cent after the Fed raised interest rates by a quarter of a percentage point.
The single currency stabilized on Friday, trading up 0.1% against a broadly strong dollar at $1.1573.
More recent indicators, however, suggest that the pace of expansion has flagged as rising oil prices, political turmoil and the possibility of trade war weigh on growth.
TARIFFS: Trump approved a plan to impose punishing tariffs on tens of billions of dollars of Chinese goods as early as Friday.
CBOT corn and soybean futures tumbled as uncertainty about tariffs and favorable crop weather in the US Midwest prompted funds to liquidate big long positions.
That sent the euro lower, while government bonds rallied. Traders are anxious about China, Mexico and other countries curbing demand for USA grain and soy exports.
"This is the most lopsided, mismatched labor market in the nation´s history", said Chris Rupkey, chief financial economist at MUFG Union Bank.
Volume on U.S. exchanges was 6.75 billion shares, compared with the 6.70 billion average for the full session over the last 20 trading days.