US Dollar Holds Firm Amid Mixed Data, Market Awaits Fed Guidance
The US dollar remained strong on Tuesday after posting its biggest daily gain since May on Monday, rising 1.0%. The rally followed the announcement of a major trade framework between the US and the European Union, which markets interpreted as highly favorable for Washington. Investors bet that the deal would bolster US strategic and economic influence, supporting demand for the greenback.
The US Dollar Index (DXY), which tracks the dollar against a basket of six major currencies, hovered around the 99.00 level — a psychological threshold and the highest level since June 23. This upward momentum is driven by easing trade tensions and overall solid US economic fundamentals. Despite some mixed economic readings, confidence in the US outlook continues to support the dollar.
On the data front, consumer confidence rose to 97.2 in July, beating expectations and reflecting stronger sentiment. However, the latest JOLTS report showed a drop in job openings to 7.44 million, below both the revised May figure and analyst forecasts — suggesting the labor market may be cooling slightly. Still, the data wasn’t enough to derail the dollar’s rally.
The greenback has recovered significantly since hitting a more-than-three-year low of 96.38 on July 1. With a gain of over 2% this month, the dollar is set for its first monthly increase since February. The recovery is also supported by successful trade discussions with key partners including Japan, Indonesia, and Vietnam, easing fears of further trade-related disruptions.
Attention now turns to the Federal Reserve’s monetary policy decision on Wednesday. While the Fed is widely expected to keep interest rates steady, investors will closely analyze Chair Jerome Powell’s tone for any hawkish or dovish signals on inflation, labor market strength, and future policy direction — all of which could determine the next move for the dollar, currently trading near multi-week highs.
Source: Newsmaker.id
