The dollar index (DXY00) Thursday fell by -0.71%. The dollar on Thursday fell back from Wednesday’s 4-month high after the FOMC cut the fed funds target range by -25 bp. Also, lower T-note yields Thursday weakened the dollar’s interest rate differentials. In addition, Thursday’s US economic news weighed on the dollar after Q1 nonfarm productivity rose less than expected and Q1 unit labor costs rose more than expected.
On the positive side, US weekly initial unemployment claims rose less than expected, a sign of labor market strength that is hawkish for Fed policy. The dollar also found support from hawkish comments from Fed Chair Powell, who said core inflation is still "somewhat elevated."
