The dollar index (DXY00) on Thursday rose by +0.29% and posted a 3.5-week high. Signs of strength in the US economy may keep the Fed from cutting interest rates and are supportive of the dollar. Weekly initial unemployment claims unexpectedly fell to a 3-month low, June retail sales rose more than expected, and the July Philadelphia Fed business outlook survey rose to a 5-month high. The dollar added to its gains Thursday after Fed Governor Kugler said it's appropriate for the Fed to hold rates steady for "some time." However, the dollar fell back from its best levels on dovish comments from San Francisco Fed President Mary Daly, who said she expects two 25 bp rate cuts this year.
US weekly initial unemployment claims unexpectedly fell -7,000 to a 3-month low of 221,000, showing a stronger labor market than expectations of an increase to 233,000.
