The U.S. dollar index (DXY00) dropped by 0.17% on Thursday, after reaching a two-month high earlier in the day, influenced by a significant 2% decline in crude oil prices and unexpected weekly U.S. jobless claims rising to 229,000—its highest level in four months. President Trump announced the cancellation of planned strikes against Iran, leading to a sharp rally in stocks and reducing inflation expectations, which could prompt the Federal Reserve to loosen monetary policy.
In related data, the May Producer Price Index (PPI) rose 1.1% month-over-month and 6.5% year-over-year, surpassing expectations but indicating mixed inflationary pressures. The European Central Bank raised interest rates by 25 basis points to 2.25% while adjusting its 2026 Eurozone GDP estimate down to 0.8% and raising the inflation forecast to 2.5%. Meanwhile, the Japanese yen strengthened against the dollar as expectations grew for a potential Bank of Japan rate hike.
In the commodities market, gold prices experienced a selloff, closing at a 6.75-month low, although they rebounded post-market after Trump’s peace deal announcement regarding Iran. Strong demand for gold from central banks was noted, with China’s PBOC reserves increasing by 320,000 ounces in May.
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