US dollar rises driven by positive economic data, market adjustments

(MENAFN) The US dollar rose on Thursday during early trading, supported by strong labor market and inflation data released the previous evening. These indicators suggest the Federal Reserve may maintain higher interest rates for an extended period. The data revealed robust economic conditions, with an expanding labor market and a decline in weekly jobless claims. Meanwhile, the Federal Reserve’s preferred inflation gauge highlighted stable yet persistent price pressures.

The main dollar index, which tracks the currency’s performance against six major peers, increased by 0.15 percent to reach 106.2 points. This rise reflects continued investor confidence in the dollar amidst signals of economic resilience and the Fed's potential hawkish stance.

Conversely, US Treasury bond yields experienced a slight decline, with the 10-year yield falling by 4 basis points to 4.262 percent as of 5:00 AM GMT. Despite this dip, the dollar index has shown mixed performance recently, dropping 0.7 percent over the past five trading sessions but gaining 2.2 percent throughout the month.

These monthly gains come in the aftermath of US President Donald Trump securing a second term in office, a development that has influenced market sentiment and bolstered the dollar’s value. Investors now await further economic signals and Federal Reserve guidance to assess the trajectory of interest rates and the broader economic outlook.

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