The dollar index (DXY00) Thursday fell by -0.05%. The dollar on Thursday fell to a 6-week low and posted modest losses after US weekly jobless claims unexpectedly rose to a 7-3/4 month high, a dovish factor for Fed policy. The dollar also weakened after US Q1 nonfarm productivity was revised lower and Q1 unit labor costs were revised higher. In addition, the dollar was pressured after EUR/USD rallied on hawkish comments from ECB President Lagarde.
However, the dollar recovered nearly all of its losses Thursday on signs of easing trade tensions between the US and China after US President Trump spoke with Chinese President Xi Jinping by telephone and agreed to further trade talks. The dollar also garnered some support after the US Apr trade deficit narrowed to a 20-month low. In addition, hawkish Fed comments lifted the dollar on Thursday when Fed Governor Kugler and Philadelphia Fed President Harker said they favored keeping interest rates steady.
