The U.S. dollar remained relatively stable Thursday as investors exercised caution ahead of key economic data, amid uncertainty over how much further the Federal Reserve might ease monetary policy.
At 03:00 ET (08:00 GMT), the Dollar Index, tracking the greenback against six major currencies, inched up to 97.552 after climbing 0.6% overnight to a two-week high.
Fed speakers in the spotlight
The greenback gained support on Wednesday after Fed Chair Jerome Powell reiterated his cautious stance on additional easing, noting the central bank faces a “challenging situation” balancing stronger-than-expected inflation with slower job growth.
Some of those gains eased Thursday morning as traders focused on upcoming U.S. reports that could give clearer signals on the Fed’s next moves.
Weekly jobless claims, due later in the day, will be closely monitored after Fed officials highlighted a cooling labor market as the rationale behind the recent rate cut.
An advance estimate of second-quarter GDP is also scheduled for release today, with Friday’s personal consumption expenditures (PCE) price index—the Fed’s preferred measure of inflation—expected to provide further guidance.
A host of Fed officials are set to speak during the session, keeping markets attentive to new policy cues.
“The dollar is a little stronger as investors reassess the immediacy of a U.S. slowdown and what it means for interest rates,” said analysts at ING. “The focus will probably be on the weekly initial jobless claims data. Another low (dollar bullish) number is expected near 230k as this data continues to correct lower from 264k a fortnight ago. That spike was attributed to fraudulent claims in Texas.”
SNB keeps rates steady at zero
In Europe, EUR/USD traded flat at 1.1738, lacking momentum in the absence of major eurozone economic indicators or ECB commentary.
“EUR/USD will be dragged around by U.S. events today. A move under 1.1725 in EUR/USD could damage the short-term picture and see the correction extend towards the 1.1660 area,” ING said.
GBP/USD remained largely unchanged, while USD/CHF rose 0.1% to 0.7958 after the Swiss National Bank kept its key interest rate at zero, as widely expected.
The SNB’s decision marked its first hold in seven meetings since starting rate cuts in March 2024, following the U.S. imposition of a 39% tariff on Swiss exports in August.
Asia-Pacific currencies in focus
Elsewhere, USD/JPY fell 0.1% to 148.69 after jumping nearly 1% overnight. The Bank of Japan’s July policy minutes showed some board members favored considering future rate hikes, highlighting internal divisions.
USD/CNY edged down 0.1% to 7.1266, while AUD/USD rose 0.2% to 0.6592, buoyed by hotter-than-expected inflation data from Australia released earlier in the week.
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