The U.S. dollar shows signs of its first monthly increase this year because of better trade relations and positive domestic economic indicators. The dollar reached its highest value since late May against the yen on Thursday because of Federal Reserve hawkishness and stable U.S. employment numbers. The dollar experienced its largest monthly increase of 4.4% during July since December 2024.
The Bank of Japan maintained its 0.5% interest rates while increasing its inflation projections and the Federal Reserve kept its rates constant despite President Donald Trump’s demands for a reduction. The dollar maintained market confidence through Fed Chair Jerome Powell’s indication that there is no need to adjust monetary policy.
The euro continues to decline because investors lost faith in EU trade concessions which will result in a 3% monthly depreciation. The dollar index maintained its position after its significant increase on Wednesday while the Swiss franc reduced its recent appreciation.
