DXY Rises to Over 3-Week High

The US dollar index climbed above 98.7 on Thursday, reaching its highest level in over three weeks, after stronger-than-expected retail sales data eased concerns about consumer spending.

Retail sales rose 0.6% in June, bouncing back from May’s sharp 0.9% drop and surpassing forecasts of 0.1%.

The rebound suggests resilience in household demand and supports the case for the Federal Reserve to keep interest rates unchanged for now.

As a result, traders have scaled back expectations for rate cuts in 2025, with markets now pricing in fewer than two reductions this year, down from three anticipated earlier in July.

Political uncertainty added to recent market volatility, as speculation swirled about Fed Chair Jerome Powell’s future.

However, President Trump later clarified he had no immediate plans to replace Powell, though he continued to criticize the central bank for not cutting rates more quickly.