The Dollar Index (DXY) recovered from a three-month low, finishing up 0.08% on Thursday, fueled by positive U.S. economic indicators, including a drop in weekly initial jobless claims to 206,000—6,000 less than expected. Additionally, the Philadelphia Fed business outlook survey rose to 47.4, its highest in over five years, significantly surpassing forecasts of 24.8. Speculation of a Federal Reserve rate hike also increased due to a 2% rise in WTI crude oil prices, reaching a one-month high.
Markets estimate a 35% probability of a 25 basis point rate hike at the upcoming FOMC meeting scheduled for September 15-16. Meanwhile, the euro fell by 0.03%, affected by the dollar’s rebound and the rising oil prices, which could diminish economic performance in the Eurozone. The European Central Bank is seen as nearly certain (95% chance) to raise rates by 25 basis points at its meeting on September 10.
In Japan, the yen rose 0.63% amid strong trade data, with July exports climbing 23.2% year-over-year, outperforming expectations. Market anticipation for a Bank of Japan rate hike is also high, with an 81% likelihood of a 25 basis point increase on September 18, given the government’s support for such a move to strengthen the yen.
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