The U.S. dollar index (DXY) rose by 0.14% on Thursday, recovering from early losses as liquidity demand increased due to stock market fluctuations. Weekly initial unemployment claims rose by 10,000 to 200,000, surpassing expectations of 205,000, while continuing claims fell to a two-year low of 1.766 million. Additionally, Q1 nonfarm productivity increased by 0.8% and unit labor costs rose by 2.3%. Boston Fed President Susan Collins and Cleveland Fed President Beth Hammack supported maintaining current interest rates during their hawkish comments.
In other economic indicators, March construction spending rose by 0.6%, exceeding expectations of 0.3%. Similarly, consumer credit surged by $24.855 billion, surpassing anticipated growth of $13.720 billion, marking the largest increase in over three years. Meanwhile, optimism surrounding a potential U.S.-Iran peace deal curbed safe-haven demand for the dollar, leading to its initial decline before recovery amid positive economic data.
Internationally, the euro fell slightly by 0.02%, despite stronger than expected Eurozone retail sales figures. In Japan, authorities are reported to have intervened in the forex market, potentially using around $30 billion to bolster the yen, which initially appreciated but later declined as the dollar strengthened. The markets are currently anticipating a potential 25 basis point rate hike by both the European and Japanese central banks in their upcoming meetings.
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