The dollar meandered on Thursday after U.S. jobless claims rose more than expected last week, indicating a cooling labor market that could prompt the Federal Reserve to cut interest rates in early 2024 as it tries to engineer a soft landing. The dollar index DXY, a measure of the U.S. currency against six peers, edged higher 0.08% as a slowing U.S. economy leads the market to perceive the Fed is done raising rates.
Claims for state unemployment benefits rose 13,000 to a seasonally adjusted 231,000 for the week ended Nov. 11, the Labor Department said. Economists polled by Reuters had forecast 220,000 claims for the latest week. The dollar plunged on Tuesday, also registering its biggest single-day decline in a year, after data on consumer prices came in softer than expected and increased the outlook for many that inflation was quickly decelerating to the Fed’s 2% target. The dollar rebounded a touch on Thursday as the market wrestled with the uncertainty of when the Fed might cut its overnight lending rate of 5.25%-5.5%, which is still restrictive to economic growth.
