The dollar index (DXY) dropped to a six-week low on Thursday, closing down by 0.99%. This decline followed weaker than expected Q2 GDP growth of 1.5%, compared to forecasts of 2.0%, and a core PCE price index easing to 3.3% year-over-year, aligned with expectations. Additionally, initial unemployment claims rose to 197,000, slightly below analyst expectations of 200,000.
In contrast, the euro surged, finishing up by 0.55% as Eurozone Q2 GDP increased by 1.0% year-over-year, surpassing expectations of 0.7%. The July economic confidence indicator for the Eurozone climbed to a five-month high of 96.9, exceeding the forecast of 96.0. Conversely, the yen strengthened against the dollar, reaching a 2.5-month high, aided by anticipated intervention from Japanese authorities and reports of rising consumer confidence.
In the commodities market, gold prices increased by 1.58% following the dollar’s decline. Notably, the People’s Bank of China reported an increase in gold reserves by 480,000 ounces to 75.44 million troy ounces in June, marking the twentieth consecutive month of increases. However, overall safe-haven demand was tempered by a rally in equity markets and rising Treasury yields.
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