The dollar index advanced for the second consecutive session on Thursday, approaching 103.9, as investors assessed the latest economic data and trade tensions.
Dollar rises for the second consecutive day
The Producer Price Index (PPI) came in softer than expected, with the headline figure remaining unchanged and the core rate slipping by 0.1% month-over-month, reinforcing the trend seen in Wednesday’s weaker-than-anticipated Consumer Price Index (CPI) report. These figures suggest easing inflationary pressures, which could influence the Federal Reserve’s policy stance in the coming months.
Meanwhile, labor market data showed initial jobless claims at 220,000, slightly below estimates but largely consistent with recent trends, indicating continued resilience in the employment sector despite the Fed’s prolonged tightening cycle.
Trade tensions still in focus
On the trade front, tensions between the US and the European Union escalated after President Trump threatened to impose a 200% tariff on wine and other alcoholic beverages from the EU in response to the bloc’s newly announced countermeasures. The threat has raised concerns about a potential trade war, which could have broader implications for global economic growth and currency markets.
Looking ahead, investors are focused on next week’s Federal Reserve policy meeting, where the central bank is widely expected to keep interest rates steady. However, market participants will closely analyze the Fed’s updated economic projections and Chair Jerome Powell’s remarks for any signals about the future path of monetary policy, particularly in light of the recent inflation and labor market data.
