The dollar index (DXY00) Thursday retreated from a 1-week high and finished down by -0.33%. The dollar slid Thursday after US weekly jobless claims unexpectedly increased, which signaled a weaker labor market that is dovish for Fed policy. Also, strength in the euro weighed on the dollar as the euro moved higher after the ECB delivered a hawkish rate cut when it refrained from pre-committing to future interest rate cuts after cutting rates Thursday.
On the positive side for the dollar, Thursday’s as-expected US Aug PPI report dampened speculation that the Fed will cut interest rates by 50 bp at next week’s FOMC meeting.
