Firm GDP and jobs figures failed to lift the DXY as in-line inflation data reduced Fed hike bets for September.
The US Dollar Index (DXY) declined to 101.45 on Thursday despite robust economic data, defying expectations for a rally. First-quarter GDP was revised up to 2.1% annualized, while personal spending and income both rose 0.7%, beating forecasts.
Weekly jobless claims fell to 215K, below the 225K estimate, and core capital goods orders surged 1.6%. However, Core PCE inflation matched expectations at 0.3% MoM and 3.4% YoY, removing the tail risk of a hotter print that could have forced the Fed’s hand.
Traders trimmed odds of a September rate hike after the data, as the Fed’s hawkish stance remains priced in at 3.75%. The market reaction signaled relief rather than a shift in the broader policy outlook.