The U.S. dollar found footing on Thursday as traders approached key economic releases with caution, amid uncertainty over the pace of further easing by the Federal Reserve.
At 03:00 ET (08:00 GMT), the Dollar Index, which measures the greenback against a basket of six major currencies, inched up slightly to 97.552 after rising 0.6% overnight to a two-week peak.
Focus on Fed commentary
The dollar’s gains on Wednesday were supported by Fed Chair Jerome Powell, who reiterated a cautious approach to additional policy easing, describing the central bank’s position as a “challenging situation” amid higher-than-expected inflation and slower job growth.
Some of that momentum eased early Thursday as investors turned their attention to a series of U.S. economic reports that may clarify the Fed’s next steps.
Weekly jobless claims, scheduled for release later in the session, will be closely watched after Fed officials highlighted a cooling labor market as a key factor behind the recent rate cut.
An advance estimate of second-quarter GDP is also expected today, with Friday’s release of the personal consumption expenditures (PCE) price index—the Fed’s preferred inflation measure—capping the week.
A number of Fed officials are slated to speak during the day, keeping markets alert for further guidance.
“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 in a note. “The focus will probably be on the weekly initial jobless claims data,” they added. “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 maintains rates at zero
In Europe, EUR/USD traded mostly flat at 1.1738, struggling for direction in the absence of major eurozone economic data 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 noted.
GBP/USD remained largely unchanged, while USD/CHF ticked up 0.1% to 0.7958 after the Swiss National Bank kept its key interest rate at zero as expected.
This decision marked the SNB’s first hold in seven meetings since it began cutting borrowing costs in March 2024, following the Trump administration’s imposition of a 39% tariff on Swiss exports to the U.S. in August.
BoJ minutes and Asia-Pacific currency moves
Elsewhere, USD/JPY dipped 0.1% to 148.69 after surging nearly 1% overnight. The Bank of Japan’s July policy meeting minutes revealed that 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, lifted by hotter-than-expected Australian inflation data released earlier this week.
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