US Dollar Gains Momentum: All Eyes on PMI Data

US Dollar Awaits PMI Data Amidst Fed Officials' Assessment

The US Dollar (USD) is demonstrating relative strength against major currencies early in the trading day, as investors await crucial economic activity data from major economies. The preliminary readings of the Manufacturing and Services Purchasing Managers' Indexes (PMI) from Germany, the Eurozone, and the UK will be closely watched during the European session. Later in the day, the US economic calendar includes weekly Initial Jobless Claims, Existing Home Sales data for July, and the same PMI releases. The minutes from the Federal Reserve's (Fed) July policy meeting, released on Wednesday, revealed that nearly all participants deemed it appropriate to leave the policy rate unchanged. According to the minutes, participants noted it would take time to gain more clarity on the magnitude and persistence of higher tariffs’ effects on inflation. The US Dollar Index (DXY) closed marginally lower on Wednesday before beginning an upward trend early Thursday. At the time of writing, the index was up 0.2% on the day, trading near 98.40. Meanwhile, US President Donald Trump called for the resignation of Fed Governor Lisa Cook after Bloomberg reported that the Director of the Federal Housing Finance Agency is urging Attorney General Pam Bondi to investigate Cook regarding a pair of mortgages. Following mixed trading in Wall Street on Wednesday, US stock indexes remained largely unchanged in the European morning on Thursday.

US Dollar Performance This Week

(A table illustrating the US Dollar's performance against major currencies this week, along with a brief analysis of the factors driving its movements, will be inserted here.)

Broader Market Analysis

In the Asian session, data from Australia showed that the S&P Global Composite PMI improved to 54.9 in early August from 53.8 in July, indicating continued expansion of private sector business activity at an accelerating pace. After losing approximately 0.3% on Wednesday, the AUD/USD pair remains under bearish pressure, trading near its lowest level since late June at around 0.6420. In Japan, the Jibun Bank Manufacturing PMI edged higher to 49.9 in August from 48.9 in July, while the Jibun Bank Services PMI declined to 52.7 from 53.6. USD/JPY is holding onto moderate gains above 147.50 in the European session on Thursday. GBP/USD failed to capitalize on UK inflation data and closed negative for the third consecutive day on Wednesday. The pair continues to edge lower early Thursday, trading below 1.3450. After closing unchanged for two straight days, EUR/USD remains on the defensive in the European morning, trading below 1.1650. Gold rose nearly 1% on Wednesday as the benchmark 10-year US Treasury bond yield declined. XAU/USD is struggling to extend its recovery gains and is trading below $3,340 early Thursday.

Frequently Asked Questions About the US Dollar

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