The US Dollar Index rises after the release of the unemployment claims data tonight, while the Greenback strengthens against several major counterparts.

The weekly unemployment claims data released tonight missed expectations for the second consecutive week. As a result, speculations about a potential interest rate hike in the US resurfaced, leading to a strengthening of the US Dollar. The US Dollar Index (DXY) was observed to rise by approximately 0.5%, reaching its highest level of around 100.80 during the New York session on Thursday (July 20th).

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The US Department of Labor reported a total of 228,000 weekly unemployment claims for the week ending on July 15, 2023. This figure was lower than the consensus estimate of 242,000 and also declined compared to the 237,000 recorded in the previous week.

This is the second time that US weekly unemployment claims data has missed expectations and decreased from the previous period. As a result, some market participants are beginning to hope that the US economy remains strong and that the Federal Reserve may raise interest rates again after July.

Last week's weakening in US inflation data initially reduced expectations for two rate hikes this year to just one. However, the probability of a second rate hike has slightly increased following the release of this week's unemployment claims data.

"The market has been searching for signs of layoffs in the U.S. and they simply aren't materializing," said Adam Button, chief currency analyst at ForexLive in Toronto. "Today's initial jobless claims number underscores again that the U.S. has an extremely strong labor market and that the Fed still has more work to do."

Several pieces of news from outside the United States have also supported the resurgence of the Greenback. GBP/USD has experienced a sharp decline in the past two days due to disappointing inflation data from the UK. Meanwhile, dovish statements from ECB officials have caused EUR/USD to plummet to its lowest level in the past five days.