The US Dollar is holding steady, supported by strong US economic data and tempered expectations for Federal Reserve interest rate cuts. Recent jobless claims data and manufacturing surveys have exceeded forecasts, indicating a resilient labor market. Markets now widely anticipate the Fed will keep rates unchanged, potentially pushing the next rate cut to June or later.
- The dollar index held around 99.3, on track for a third consecutive weekly gain.
- Strong US economic data is tempering expectations for additional Federal Reserve interest rate cuts.
- Weekly jobless claims were well below forecasts.
- Some manufacturing surveys exceeded expectations.
- Fed officials highlighted signs of labor market stability and cautioned against potential inflationary risks.
- Markets anticipate the Fed will keep rates unchanged this month.
- Forecasts for the next rate cut are pushed back to June or later.
- The US agreed to lower tariffs on Taiwanese goods from 20% to 15%.
- Taiwanese companies committed to investing at least $250 billion to expand chip manufacturing capacity in the US.
- The US Dollar Index is trading around 99.30.
- Traders are likely to look for further direction from the US December Industrial Production data.
The stability of the US Dollar is influenced by positive economic indicators within the United States. The labor market’s strength and manufacturing performance, combined with expectations of a delayed interest rate cut, are contributing to its current position. International trade developments, such as tariff adjustments and investment commitments, also contribute to the overall economic landscape impacting the dollar.