The dollar index (DXY00) fell by -0.12% on Thursday. The dollar gave up an early advance on Thursday and turned lower after T-note yields fell, narrowing the dollar’s interest rate differentials. A stronger euro also weighed on the dollar after the German Economy Ministry raised its 2026 German GDP forecast.
The dollar initially moved higher Thursday after WTI crude oil rallied more than +3%, which raised inflation expectations and is hawkish for Fed policy and supportive of the dollar. Also, hawkish comments from Fed Governor Christopher Waller and St. Louis Fed President Alberto Musalem were bullish for the dollar, as they said they expect additional Fed rate hikes to tame inflation. In addition, Thursday’s unexpected decline in weekly US jobless claims to a 2.5-month low shows labor market strength that is bullish for the dollar.
