The dollar index rose by +0.29% to a 3.5-week high, supported by strong US economic indicators. Weekly initial unemployment claims hit a 3-month low, June retail sales exceeded expectations, and the July Philadelphia Fed business outlook survey reached a 5-month high. Fed Governor Kugler supports holding rates steady, while San Francisco Fed President Daly expects two rate cuts this year.

US weekly initial unemployment claims unexpectedly dropped to a 3-month low of 221,000, signaling a robust labor market. June retail sales rose by +0.6% m/m and exceeded expectations. The July Philadelphia Fed business outlook survey surged to a 5-month high of 15.9. Fed Governor Kugler advocates keeping interest rates unchanged for the time being.

President Trump plans to notify over 150 countries of potential tariff rate increases to 10% or 15% effective August 1. Nvidia and Advanced Micro Devices may resume sales to China, hinting at possible trade negotiations. Treasury Secretary Bessent could extend the August 12 tariff deadline, with US-China talks in progress.

The dollar’s strength led to a -0.40% drop in EUR/USD to a 3.5-week low. Italian Deputy Premier Tajani suggested ECB rate cuts to weaken the euro. Japanese Prime Minister Ishiba’s party faces election risks, pressuring the yen. Japanese trade data showed mixed results, with exports falling -0.5% y/y and imports rising +0.2% y/y in June.

Gold closed down -0.41% while silver rose +0.48% on Thursday. A stronger dollar and Fed rate hold signals weighed on precious metals. However, silver rebounded when Fed President Daly hinted at rate cuts. Safe-haven demand amid global trade tensions and fund buying supported precious metals prices.

Read more at Yahoo Finance: Solid US Economic News Lifts the Dollar