The dollar was under pressure on Thursday as U.S. economic data indicated slowing growth, while the yen remained near a 38-year low, prompting concerns of potential government intervention. The euro stayed close to a three-week high against the dollar, and the pound strengthened ahead of UK elections.
The dollar index, which measures the dollar against other currencies, held steady at 105.28 after briefly dropping to its lowest level since June 13 on Wednesday. Weaker-than-expected U.S. economic data, including a soft services report and ADP employment report, suggested a slowing economy.
Analysts noted a shift in U.S. economic data, with signs of weakness in the labor market and easing inflationary pressures. Attention now turns to the nonfarm payrolls report expected on Friday, which could show an increase of 190,000 jobs in June.
Market expectations for a U.S. rate cut in September increased to about 68%, up from 56% the previous week. Despite lower dollar and yield levels, the yen remained close to a decades-low against the dollar, prompting concerns of Japanese government intervention.
The Bank of Japan’s gradual approach to normalizing interest rates continues to support a weaker yen. The Japanese currency slightly strengthened against the dollar but remained near its lowest level in years. Meanwhile, sterling held steady before the UK elections, with the euro also maintaining its strength against the dollar.
In the cryptocurrency market, bitcoin rose to $60,376.65. The outlook remains uncertain as investors monitor economic data and political developments in key markets.