The dollar index (DXY) reached a new 2.75-month low on Wednesday but ended the day little changed. Despite a stronger-than-expected US GDP report of +4.3%, the likelihood of a -25 basis point rate cut at the next Federal Open Market Committee (FOMC) meeting decreased from 20% to 16%.
In a report released on Wednesday, US weekly initial unemployment claims fell by 10,000 to 214,000 for the week ending December 20, exceeding expectations of 224,000. Continuing claims rose by 38,000 to 1.923 million, slightly above the anticipated 1.900 million.
China’s central bank indicated its focus on long-term stability at its quarterly monetary policy meeting, ruling out sudden interest rate cuts amid ongoing challenges such as property market weaknesses and weaker domestic demand. Additionally, the market anticipates a 3% chance of a +25 basis point rate hike by the European Central Bank at its next policy meeting on February 5.
