The dollar index (DXY) rose by 0.23% on Thursday, recovering from a 1.5-week low amid reports that President Trump favors Fed Governor Waller for the new Fed Chair position. The appointment could alleviate market concerns regarding the independence of the Federal Reserve. Meanwhile, US weekly initial jobless claims increased by 7,000 to 226,000, exceeding expectations of 222,000, while continuing claims climbed by 38,000 to a 3.75-year high of 1.974 million.
In economic reports, Q2 nonfarm productivity rose by 2.4%, exceeding forecasts of 2.0%, while unit labor costs increased by 1.6%, slightly above expectations of 1.5%. Additionally, June consumer credit rose by $7.371 billion, just below expectations of $7.500 billion. However, San Francisco Fed President Mary Daly indicated potential adjustments in monetary policy due to a softening labor market, supporting speculation around possible interest rate cuts in the coming months.
In tariff news, President Trump proposed a 100% tariff on semiconductor imports, with exceptions for companies committed to domestic production. A separate tax on electronic products using semiconductors is also planned. The average US tariff is forecasted to rise to 15.2% if these measures are implemented, up from 13.3%. This backdrop adds to concerns about overall US economic growth and may impact global markets, including the eurozone, where the EUR/USD fell by 0.31% following weak German industrial production data.
