Investing.com – The dollar traded higher against a basket of major currencies on Thursday, as recent political turmoil in Washington was offset by a slew of stronger U.S. economic data.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose by 0.20% to 97.53 by 13:11 EDT.
The dollar was on track to snap a five-day losing streak, as investors cheered the release of better than expected initial jobless claims and manufacturing data.
The number of Americans who filed for unemployment insurance for the week ended May 12, dropped by 4000 to 232,000, the Labor Department said.
In a separate report the Federal Reserve Bank of Philadelphia said that its Philly Fed manufacturing index rose to a seasonally adjusted 38.8, from 22.0 in the preceding month, well above analysts’ expectations of a rise to 19.5.
The stronger bout of economic data shifted the trading narrative from the ongoing political saga in Washington to Federal Reserve monetary policy amid a fall in expectations of a June rate hike.
Recent political scandals engulfing President Donald Trump have dominated market moves and eased expectations of a June rate hike, as investors continued to fret about the impact the current political turmoil could have on Trump’s ability to deliver on his pro-growth economic agenda.
According to investing.com’s Fed rate monitor tool, 63% of traders expect the Federal Reserve to hike interest rates in June, compared to nearly 80% in the previous week.
Meanwhile, EUR/USD pared gains to trade at $1.1127, down 0.30%, while EUR/GBP fell 0.51% to 0.8560.
GBP/USD rose 0.20% to $1.2999, its highest level since September, as the UK economy continued to show signs of strength, after retail sales jumped 2.3% in April.
USD/JPY traded $110.90, up 0.08%, while the USD/CAD traded roughly flat at $1.3603.