The dollar index (DXY00) fell on -0.54%to 3–1/4 years low on Thursday. The dollar retreated after a report by the Wall Street Journal, stating that President Trump is considering accelerating the announcement of the next Fed Chair. The dollar was a low in a downward revision in the Q1 GDP in Thursday’s US Economic News and a wide-to-adaptable May trade deficit report, which was a negative factor for Q2 GDP.
The dollar received the underlying support from a strong-to-precedent initial unemployment claims, core capital goods order and pending home sales report. In addition, Hawkish comments of Richmond Fed President Barkin were supporters of the dollar, when she said she was waiting for more clarity before adjusting the interest rates.
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The US weekly initial unemployment claims fell from 7,000 to 236,000, showing a strong labor market compared to the expectations of 243,000. However, the weekly continuous claims increased to 3–1/2 years above the expectations of 1.950 million, 3–1/2 years high of 1.974 million to 3–1/2 years, hinting to more people, living out of work for a long time.
The US Q1 GDP was revised to a low -0.5% (Q/Q annual), -0.2% weakened with no change because Q1 personal consumption was modified from +1.2% to +0.5%. The Q1 Core PCE Point Index was modified more than +3.5% (Q/Q annual), which was stronger than unchanged +3.4% expectations.
US Capital Goods New Order Nondifence X-aiCraft and Parts increased +1.7% m/m, +stronger than expectations of +0.1% m/m and the biggest increase in 4 months.
America’s trade may trade deficit -was wider than expectations of $ 96.6 billion -$ 86.1 billion, a negative factor for Q2 GDP.
America can be pending home sales +1.8% m/m, +stronger than expectations of 0.1% m/m.
Richmond Fed President Barkin said he hoped that tariffs would pressurize the prices upwards, and with much more uncertain, he is waiting for more clarity before adjusting the interest rates.
Wall Street Journal reported that President Trump soon overtook the dollar on Thursday after the Fed Chair Powell announced the replacement as September, an unusual initial appointment. Trump reinforced the expectations of a more Dwish-Caning Fed after criticizing Pavel to keep the interest rates stable. Because Pavel’s term ends in May 2026, the traditional three-four-four-month infections may allow, while announcing a new Fed chair, may allow the chair-in-weting to affect expectations about the potential path for interest rates. An excessive Dwish Fed will possibly produce high inflation, which reduces the value of the dollar.
The markets are giving 25% opportunities to the -25 BP rate cut in the market July 29-30 FOMC meeting.
EUR/USD (^eurusd) increased +0.43% and 3-3/4 years high. After the dollar fell on the report, the euro went more that President Trump may soon fed the successor of Fed Chair Powell as September. The euro was reduced after unexpectedly declining of the German June GFK Consumer Trust Index.
German June GFK Consumer Confidence Index unexpectedly fell from -0.3 to -20.3, weakened by hopes of growth of -19.2.
In the July 24 policy meeting, 9% of the probability of cutting -25 bp rate cut by ECB is pricing.
USD/JPY (^usdjpy) -fell to 0.63%. Yen climbed a height of 1-1/2 weeks against the dollar as the dollar fell into the dollar on the report of Wall Street Journal that President Trump would soon name Fed Chair Powell to Fed Chair Powell’s successor. The 10-year-old T-Note yield at the bottom of the 7-week Thursday’s slide was also a slowdown for the dollar and a boom for the yen.
August Gold (GCQ25) increased +4.90 ( +0.15%) on Thursday, and July Silver (Sin25) increased to +0.481 ( +1.33%). Precious metals on Thursday shut down a higher on the report that President Trump could announce his new Fed pick up early, resulting in inflation and an increase in demand for precious metals in the form of price reserves. The dollar was also a rapid factor for precious metals for a new 3–1/4 years in index. Copper prices in silver prices were supported by a Thursday rally up to a height of 2-3/4 months.
The prices of precious metals were reduced by reducing the demand in shares with a rally. In addition, Hawkish comments by Richmond Fed President Barkin weighed at gold prices when he said he was waiting for more clarity before adjusting interest rates. In addition, low geophysical risks in the Middle East curb the demand for safe-heaven for precious metals as the ceasefire between Israel and Iran continues. The amendment below Thursday for the US Q1 GDP was negative for demanding industrial metals and a slowdown for silver prices.
On the date of publication, Rich Escpland did not have the positions mentioned in any securities mentioned in this article (either direct or indirectly). All information and data in this article is only for informative purposes. For more information, please see the Barkart Disclosure Policy here.
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