The dollar index fell by 0.18% on Thursday, marking a drop from a 7-week high, influenced by weaker-than-expected U.S. economic data. Weekly jobless claims rose by 5,000 to 215,000, exceeding expectations of 211,000, while Q1 GDP was revised down to 1.6%, lower than the anticipated 2.0%. Additionally, April new home sales decreased by 6.2% to 622,000, falling short of the expected 660,000.
Economic indicators also showed April capital goods orders non-defensive ex-aircraft and parts fell 1.1% month-over-month, significantly below expectations of a 0.4% increase. Fed officials, including St. Louis Fed President Alberto Musalem, have expressed concerns over rising inflation, which is running above the target, indicating a likelihood of a future rate hike with swaps markets currently discounting a 0% chance for a 25 bp rate cut at the next FOMC meeting on June 16-17.
In the Eurozone, the May economic sentiment indicator rose to 93.5, above expectations, while comments from ECB officials hint at an 89% chance of a 25 bp rate hike at the upcoming meeting. Precious metals recovered from previous losses, with June COMEX gold up 1.14% supported by the dollar’s decline and weaker U.S. economic signals influencing Fed policy.
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