Dollar Set for 3rd Week of Gains
The dollar index held around 99.3 on Friday and was on track for a third consecutive weekly gain, after a string of strong US economic data led markets to temper expectations for further interest rate cuts by the Federal Reserve. Weekly jobless claims, which were well below expectations, confirmed the labor market remains solid, while several manufacturing surveys also came in better than expected.
The tone of Fed officials further reinforced this sentiment. Several policymakers assessed that the labor market was stabilizing, while also warning of lingering inflation risks. The market now almost unanimously expects the Fed to hold rates at its meeting later this month, with the timing of the next rate cut widely pushed back to June or later.
Beyond data and the Fed, dollar sentiment also received a boost from trade and geopolitical issues. The US agreed to lower tariffs on Taiwanese goods from 20% to 15%, while Taiwanese companies committed to investing at least US$250 billion to expand chip manufacturing capacity in the US. On the geopolitical front, President Donald Trump signaled that action against Iran could be delayed, but reiterated his ambition to push for the acquisition of Greenland—keeping markets wary of headline risk. (asd)
Source: Newsmaker.id
