Dollar Index Ends Little Changed, But Bearish Sentiment Continues

Group 1: Dollar Index and Economic Indicators - The dollar index fell to a new 2.75-month low but recovered to end the day little changed, indicating underlying 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 and indicated it will not engage in sudden interest rate cuts to address issues like property market weakness and weak domestic demand [3] - The Federal Reserve is expected to cut interest rates by about -50 basis points in 2026, while the Bank of Japan (BOJ) is expected to raise rates by +25 basis points 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 regarding President Trump's potential appointment of a dovish Fed Chair, which could be bearish for the dollar [5] - The euro saw support from ECB member comments indicating satisfaction with the current outlook for no interest rate cuts, with ECB Governing Council member Yannis Stournaras stating the need for flexibility in policy adjustments [6]