The dollar index remained above 106.5 on Thursday, following a rebound in the previous session, supported by expectations that Trump’s policies could drive inflation and potentially constrain future Federal Reserve rate cuts.
Dollar strengthens on Trump, Fed outlook
Market attention has shifted to Trump’s potential cabinet picks to gauge whether his administration will deliver on campaign promises. On the monetary policy front, Fed governors Michelle Bowman and Lisa Cook presented conflicting views on inflation and the prospects for further easing in separate statements on Wednesday. Investors are now eyeing key economic indicators, including initial jobless claims and existing home sales, along with additional comments from Fed officials.
Safe-heaven demand boosts the dollar
The dollar also gained from renewed safe-haven demand amid escalating tensions between Russia and the West, strengthening broadly against other currencies, with the euro, kiwi, and yen experiencing the sharpest declines.
