Greenback Extends Winning Streak as Economic Data Solidifies Fed Policy Outlook

The U.S. dollar is on track for its fourth consecutive weekly gain, maintaining upward momentum as recent economic indicators reinforce the belief that the Federal Reserve will hold interest rates steady for the remainder of the year. Thursday’s Commerce Department report showed retail sales grew by 0.5% in April, aligning with analyst expectations and suggesting that American consumer spending remains robust despite broader economic caution. Meanwhile, the labor market continues to show stability, with initial jobless claims coming in at 211,000, slightly surpassing the projected 205,000. Inflationary pressures also remain a focal point; import prices climbed 1.9% last month, significantly outpacing the 1.0% forecast, largely driven by a four-year high in fuel costs. Kansas City Fed President Jeffrey Schmid highlighted inflation as the primary risk to the economy, emphasizing the nation's resilience. In the currency markets, the dollar index rose 0.3% to 98.83, while the euro slipped 0.3% to $1.1676. Against the Japanese yen, the dollar climbed 0.2% to 158.18, though it saw a minor 0.03% dip against the offshore Chinese yuan to 6.7856. Geopolitical tensions, including the ongoing conflict involving Iran and its impact on the Strait of Hormuz, have kept crude oil prices elevated at $101.17 per barrel, further influencing market sentiment as investors monitor high-stakes trade discussions between the U.S. and China.