Dollar Stumbles at 97, Jobless Claims in Focus
The US Dollar Index (DXY) held around 97.00 in the European session after losing intraday gains. Market participants await tonight's release of US initial jobless claims for further direction.
Despite weakening, the dollar remains supported by strong inflation projections. This dampens expectations for more aggressive interest rate cuts. The Fed cut rates by 25 basis points—the first this year—and the dot plot suggests an additional 50 basis points of easing before the end of the year, slightly above the June projection.
Chairman Jerome Powell was cautious, calling this move "risk management" amidst a weakening labor market. He emphasized that there was no urgency to accelerate the cuts. New Governor Stephen Miran had originally favored a 50 basis point cut, but the committee was deemed less dispassionate than initially expected.
Sentiment-wise, some market participants were disappointed that the Fed did not provide a clear path for cuts. This cautious outlook—as highlighted by Franklin Templeton analysts—makes the dollar vulnerable to short-term fluctuations while awaiting the next jobs data and economic signals.
Key points:
DXY approaches 97.00; daily gains fade.
The Fed cuts 25 bps; the dot plot suggests an additional 50 bps this year.
Powell: The cut is "risk management," not a signal for aggressive easing.
Miran prefers 50 bps → policy tone remains cautious.
Market focus: Initial Jobless Claims tonight for new direction. (ads)
Source: Bloomberg.com
