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Dollar Gains Strength as Jobless Claims and Producer Prices Rise

The U.S. dollar experienced growth against major currencies on Thursday, following jobless claims data that supported the Federal Reserve's decision to pause interest rate hikes. However, the possibility of year-end cuts remains uncertain.


Jobless Claims Reach Highest Level Since 2021

A surge in jobless claims was recorded last week, reaching the highest since late 2021. This increase suggests that higher interest rates are negatively impacting the labor market.

Labor Market Remains Tight

Despite the increase in jobless claims, the labor market is still tight. In March, there were 1.6 job openings for every unemployed person, well above the 1.0-1.2 range, indicating a balanced job market without excessive inflation.

Moderate Rise in U.S. Producer Prices

U.S. producer prices increased moderately last month, with the smallest annual growth in producer inflation in over two years. This indicates that inflation pressures are easing.

No Strong Case for Year-End Rate Cuts

Despite recent developments, analysts believe there is no strong case for rate cuts by the end of the year, as the Federal Reserve is expected to pause rate hikes.

Dollar Index Experiences Growth

The dollar index, which measures the U.S. currency against six major counterparts, rose by 0.7% to 101.92.

Sterling and Euro Decline

The Sterling declined by 0.8% after the Bank of England raised interest rates for the 12th consecutive time, while the euro dropped 0.6% due to weaker Chinese post-COVID recovery data.

Dollar Recovery Remains Intact

The dollar's recovery continues as China's economic weakness and cautious rate guidance from the Bank of England overshadow signs of a weakening U.S. labor market and moderating inflation.

Fed Funds Futures Traders Anticipate Rate Cuts in September

Traders of Fed funds futures expect a pause before potential rate cuts in September, with the Fed's target range currently at 5% to 5.25%.