The dollar index (DXY) rose by 0.27% on Thursday, buoyed by stronger-than-expected U.S. economic reports, including a 10-week low in weekly jobless claims at 208,000, a 0.2% increase in June retail sales, and a record high of 41.4 in the July Philadelphia Fed business outlook survey. Kansas City Fed President Jeff Schmid and Dallas Fed President Lorie Logan expressed support for tighter monetary policy, contributing to the dollar’s strength.
In related developments, heightened tensions between the U.S. and Iran have led to fresh airstrikes and retaliation, which may impact crude oil prices and indirectly influence Fed policies. The swaps market reflects only a 10% probability for a 25 basis point rate hike at the next Federal Open Market Committee meeting on July 28-29.
Gold and silver prices fell sharply, with gold down 1.47% to a two-week low due to anticipated tightening by the Fed and liquidation in gold and silver ETFs hitting multi-month lows. Meanwhile, China’s central bank has continued to boost its gold reserves, adding 480,000 ounces to reach 75.44 million ounces in June.
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