US Dollar Index (DXY) approaches multi-week highs at 98.44 in risk-off markets
- The Dollar appreciates due to risk aversion amid global trade uncertainty.
- Speculation about Fed Chairman Powell’s resignation is supporting the US Dollar so far.
- Later today, US Jobless Claims and Retail Sales data will give further clues about the impact of tariffs on the US economy.
The US Dollar is outperforming its main rivals on Thursday, supported by risk-averse markets amid growing anxiety about trade tariffs and the ongoing pressures on Fed Chairman Powell, which have boosted speculation about his resignation.
The US Dollar Index (DXY), which measures the value of the Greenback against a basket of the six most traded currencies, retraces Wednesday’s losses and trades 0.4% higher on the day, at the 98.20 area, coming closer to the three-week high of 98.40.
The Dollar appreciates on trade uncertainty and the Trump-Powell standoff
Risk aversion is boosting the US Dollar, with uncertainty about global trade at high levels as the August 1 deadline for higher unilateral tariffs on exports to the US approaches, amid a lack of progress in negotiations to cut a better deal.,
These tensions are so far supporting the US Dollar, although a potential resignation from Powell and his replacement with a candidate with a more dovish agenda might lead to higher inflation and the erosion of investors’ confidence in the US financial system, with very negative consequences for the Dollar.
In the macroeconomic domain, US PPI data showed some moderation on factory gate inflation, which eased concerns triggered by the higher CPI numbers seen on Tuesday. Today, the focus will be on June’s Retail Sales and Weekly Jobless claims, which will provide further insight into the impact of tariffs on consumption and the labour market.
Economic Indicator
Initial Jobless Claims
The Initial Jobless Claims released by the US Department of Labor is a measure of the number of people filing first-time claims for state unemployment insurance. A larger-than-expected number indicates weakness in the US labor market, reflects negatively on the US economy, and is negative for the US Dollar (USD). On the other hand, a decreasing number should be taken as bullish for the USD.
Read more.Next release: Thu Jul 17, 2025 12:30
Frequency: Weekly
Consensus: 235K
Previous: 227K
Source: US Department of Labor
Every Thursday, the US Department of Labor publishes the number of previous week’s initial claims for unemployment benefits in the US. Since this reading could be highly volatile, investors may pay closer attention to the four-week average. A downtrend is seen as a sign of an improving labour market and could have a positive impact on the USD’s performance against its rivals and vice versa.
Economic Indicator
Retail Sales (MoM)
The Retail Sales data, released by the US Census Bureau on a monthly basis, measures the value in total receipts of retail and food stores in the United States. Monthly percent changes reflect the rate of changes in such sales. A stratified random sampling method is used to select approximately 4,800 retail and food services firms whose sales are then weighted and benchmarked to represent the complete universe of over three million retail and food services firms across the country. The data is adjusted for seasonal variations as well as holiday and trading-day differences, but not for price changes. Retail Sales data is widely followed as an indicator of consumer spending, which is a major driver of the US economy. Generally, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
Read more.Next release: Thu Jul 17, 2025 12:30
Frequency: Monthly
Consensus: 0.1%
Previous: -0.9%
Source: US Census Bureau
Retail Sales data published by the US Census Bureau is a leading indicator that gives important information about consumer spending, which has a significant impact on the GDP. Although strong sales figures are likely to boost the USD, external factors, such as weather conditions, could distort the data and paint a misleading picture. In addition to the headline data, changes in the Retail Sales Control Group could trigger a market reaction as it is used to prepare the estimates of Personal Consumption Expenditures for most goods.
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