FX.co ★ Dollar Rebounds on Strong Labor Data

The U.S. Dollar Index climbed to 97.5 on Thursday, overturning earlier declines after new data highlighted the ongoing robustness of the labor market, despite persistent trade tensions. Initial jobless claims decreased for the sixth consecutive week, falling to 217,000 from the previous 221,000, which contradicted forecasts predicting an increase to 227,000. Regarding trade developments, reports indicated that the U.S. and the EU are moving closer to an agreement, with discussions centered on establishing a baseline 15% tariff on EU imports. Concurrently, Treasury Secretary Scott Bessent suggested that the existing tariff truce with China is likely to extend beyond the August 12 deadline. In the realm of monetary policy, the Federal Reserve is anticipated to maintain a prudent stance on further interest rate reductions, amid apprehensions that tariffs might stoke inflation. Heightening the tension, President Trump, who has been outspoken in his criticism of Fed Chair Powell, is scheduled to visit the central bank—a surprising gesture expected to further strain relations between the Federal Reserve and the administration.