St. Louis Fed President Musalem’s comments on persistent inflation lift USD, with traders eyeing flash PMI data across major economies.
The US Dollar Index (DXY) climbed near 98.90 on Thursday, supported by hawkish remarks from Federal Reserve Bank of St. Louis President Alberto Musalem. He stated underlying inflation remains too high and suggested current rates may not be sufficient to return it to target, hinting at potential rate hikes to avoid more aggressive action later.
EUR/USD held in the mid-1.1600s, while GBP/USD edged higher above 1.3600 despite the stronger Dollar. USD/JPY advanced past 159.00, driven by Fed commentary weighing on the Yen. AUD/USD slipped toward 0.7100 after soft domestic jobs data.
Markets now focus on Friday’s flash PMI surveys from the Eurozone, UK, and US, which could further influence Fed policy expectations and currency movements.