Dollar Strengthens After US Data, Fed Also "Keeps" Cut Expectations
The US dollar strengthened again on Thursday, supported by a series of economic data that signaled the economy remains quite resilient—making the market increasingly comfortable with the Fed's scenario of holding interest rates for longer. The dollar index (DXY) held around 99.09, up around 0.3%.
The main impetus came from employment and manufacturing data. Initial jobless claims fell to 198,000, while continuing claims stood at 1.884 million—reflecting a labor market that hasn't yet "cracked." At the same time, factory activity also improved: the Empire State Index expanded to 7.7, and the Philly Fed Index jumped to 12.6 (a sharp rebound from the previous month).
On the price front, the US import report also provided further support for the dollar. Import prices rose 0.4% (September–November), although the energy component declined—suggesting that goods inflation hasn't completely disappeared and the Fed has reason to remain cautious.
Comments from Fed officials today further cemented the "hold on" narrative. Chicago Fed President Austan Goolsbee emphasized that the primary focus remains on returning inflation to 2%, while noting that the labor market appears stable—meaning a rate cut would only be reasonable if the disinflationary trend is truly convincing. Meanwhile, the market is also monitoring the agenda of other Fed officials scheduled for today (including Barr, Barkin, and Schmid) for any change in tone ahead of the next FOMC meeting.
In the forex market, European currencies are under pressure: EUR/USD is holding around 1.1636, GBP/USD at 1.3366, while USD/JPY remains high at 158.79 and USD/CAD around 1.3910.
Source: Newsmaker.id
