The US dollar extended its rally for a third consecutive session in European trading on Thursday, climbing to a two-week high as optimism surrounding US trade negotiations boosted demand for the greenback. The currency found additional support from shifting interest rate expectations, as markets continued to scale back bets on a Federal Reserve rate cut in May amid resilient economic data.
The dollar’s strength reflects two key factors: progress in US trade talks with major partners and reduced expectations for near-term monetary easing. With the probability of a May rate cut now receding, traders have been adjusting their positions accordingly. The currency’s upward momentum suggests growing confidence in the US economic outlook, though market participants remain cautious ahead of key labor market and industrial production data due later in the session.
Technical indicators show the dollar index breaking through resistance levels, with momentum favoring further near-term gains. However, today’s economic releases – particularly the jobless claims report – could either reinforce the dollar’s bullish momentum or trigger profit-taking if the data surprises to the downside. Market participants are also closely monitoring developments in US-China trade relations for potential catalysts that could impact the currency’s trajectory.
Related topics:
