Dollar rises while global stock index falls; inflation and tariffs in focus
The U.S. dollar index rose on Thursday while MSCI’s global equities gauge fell as stronger-than-expected megacap earnings reports were balanced against signs of rising inflation and investor anxiousness ahead of President Donald Trump’s deadline for trade agreements.
Trump gave Mexico a 90-day reprieve from higher tariffs to negotiate a broader trade deal but was expected to issue higher final duty rates for most other countries as the clock wound down on the Friday deadline.
Earlier in the day, an economic data release showed U.S. inflation increased in June as tariffs on imports started raising the cost of some goods, supporting economists’ expectations that price pressures would pick up in the second half of the year.
Thursday’s data also showed fewer-than-expected Americans applied for unemployment benefits, while second-quarter U.S. labor costs increased slightly more than expected on a pick-up in wage growth.
The Federal Reserve kept rates steady on Wednesday, and Chair Jerome Powell said the central bank needed to wait for more data before deciding whether to adjust rates in September, sending equities lower on the day and drawing further criticism from Trump.
In currencies, the U.S. dollar was eyeing its first monthly gain for 2025 against major currencies, underpinned by hopes for clarity on trade policy and U.S. economic resilience.
For the day, the dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.26% to 100.05.
The euro was up 0.08% at $1.1413 and the Mexican peso strengthened 0.23% versus the dollar at 18.854.
But against the Japanese yen, the dollar strengthened 0.84% to 150.76 after the Bank of Japan held interest rates steady and increased its inflation forecast.
Source : Reuters
