US Dollar Extends Weekly Gains on Strong Economic Data, Fed Rate Cuts Delayed

The U.S. dollar is poised to record its second consecutive weekly gain, supported by stronger-than-expected economic data such as a rebound in retail sales and a decline in initial jobless claims, which suggest resilience in the economy despite ongoing tariff-related uncertainties. This data has eased concerns about imminent Federal Reserve rate cuts, with market expectations shifting to less easing than previously anticipated, although Fed officials remain divided on the timing and extent of potential cuts. President Donald Trump has continued to criticize Fed Chair Jerome Powell for not cutting rates faster but recently reassured investors that he does not plan to fire Powell, providing some stability to markets. The dollar index reached its highest level since late June before slightly easing, while major currencies like the Japanese yen have weakened amid political uncertainties in Japan ahead of elections. Meanwhile, the U.S. House passed the Genius Act to regulate dollar-pegged stablecoins, a significant development for the digital asset industry, which has contributed to mixed movements in cryptocurrency markets. Overall, despite recent gains, the dollar remains significantly below its levels from earlier in the year, reflecting ongoing investor caution amid fiscal and trade policy uncertainties.