Dollar Falls to Six-Week Low as Soft Data Fuels Fed Rate Cut Bets

The US dollar index extended its decline to 98.6 on Thursday, its lowest level since April 21, as a fresh batch of economic data deepened concerns about the US economic outlook.

Weekly jobless claims rose to 247,000 in the final week of May—the highest since early October 2024 and above expectations of 235,000—signaling potential softening in the labor market.

Meanwhile, separate reports showed that productivity fell more sharply than initially estimated in Q1, driven by a steeper rise in labor costs.

Additionally, April trade data revealed a narrowing in the trade deficit, largely due to a drop in imports.

Investors are now turning their attention to Friday’s nonfarm payrolls report for further clues on the Federal Reserve’s next move.

While President Trump continues to urge rate cuts, Fed officials have maintained a cautious stance amid ongoing trade uncertainties.