Dollar Index Posts 2.75-Month Low But Then Recovers

Group 1: Dollar Index and Economic Indicators - The dollar index (DXY00) reached a new 2.75-month low but later recovered, indicating ongoing weakness despite a stronger-than-expected US GDP report of +4.3% [1] - US weekly initial unemployment claims decreased by -10,000 to 214,000, showing a stronger labor market than the expected 224,000, while continuing claims rose by +38,000 to 1.923 million, indicating a weaker labor market than the expected 1.900 million [2] Group 2: Central Bank Policies - The People's Bank of China (PBOC) issued a cautious statement focusing on long-term stability, indicating no sudden interest rate cuts to address issues like property market weakness and weak domestic demand [3] - The Federal Reserve (Fed) is expected to cut interest rates by about -50 bp in 2026, while the Bank of Japan (BOJ) is expected to raise rates by +25 bp in the same year, and the European Central Bank (ECB) is expected to keep rates unchanged [4] Group 3: Dollar Pressure Factors - The dollar is under pressure as the Fed increases liquidity by purchasing $40 billion a month in T-bills, and concerns arise over President Trump's potential appointment of a dovish Fed Chair, which could negatively impact the dollar [5] - The euro (EUR/USD) is down -0.14%, but has received support from ECB member comments expressing satisfaction with the current outlook for no interest rate cuts [6]