The US Dollar strengthened, with the dollar index rising for the third consecutive session to around 99.8. This rally was primarily fueled by growing optimism surrounding global trade negotiations. Despite a surprise contraction in the US economy during the first quarter, investor sentiment remained positive. Markets are now focused on upcoming economic data releases to further assess the economic outlook.
- The dollar index climbed to around 99.8, marking its third straight session of gains.
- Optimism around global trade negotiations buoyed sentiment.
- President Trump’s remarks suggested potential trade agreements with India, Japan, and South Korea.
- He also expressed confidence in a possible deal with China.
- The US economy unexpectedly contracted by 0.3% on an annualized basis in the first quarter.
- The contraction was driven by surging imports and a sharp slowdown in consumer spending.
- Markets are focused on upcoming economic indicators like jobless claims, the ISM manufacturing survey, and the April jobs report.
- The dollar posted its strongest gains against the euro, sterling and yen.
The dollar’s recent performance suggests resilience despite some concerning economic data. Positive sentiment regarding trade negotiations is currently outweighing concerns about the contraction in the first quarter, providing support for the currency. However, the upcoming economic releases will be crucial in determining whether this upward trend can be sustained, as they will provide further insights into the overall health of the US economy.