US Dollar Forecast: DXY Firms as Treasury Yields Hold, Jobless Claims Beat

Dollar Index Firms as Treasury Yields Hold, Testing Key Pivot Levels

The U.S. Dollar Index edged higher Thursday after recovering from an early pullback, aligning with a modest uptick in Treasury yields and stronger labor market signals. The intraday reversal has placed the short-term pivot at 97.899 back in focus, with sellers expected on tests of this level while a sustained break could open the path toward the 50-day moving average at 98.900.

At 14:22 GMT, the DXY is trading 97.788, up 0.318 or +0.33%.

Federal Reserve Minutes and Weekly Claims Support Dollar Floor

The latest Federal Reserve minutes signaled policymakers broadly support rate cuts later this year, but stronger-than-expected weekly jobless claims data added weight to the resilience of U.S. employment.

Initial claims came in at 227,000, below the 235,000 estimate, supporting the “strong labor market” narrative after last week’s solid nonfarm payrolls.

Treasury yields were steady following the release, with the 10-year yield ticking up to 4.366% and the 30-year holding at 4.89%, preserving support for the dollar against major peers.

Trump’s Tariff Moves Shake Brazil, But Broader Dollar Impact Contained

President Trump’s escalation in the trade dispute with Brazil, imposing a 50% tariff set for August 1, triggered a sharp selloff in the Brazilian real, dropping 2.8% overnight to 5.6047 per dollar.

However, broader risk appetite in global markets remained intact, as Trump left open the possibility of extending deadlines if “compelling proposals” are offered.

While the Brazilian real faces downside risk, traders remain alert to potential spillovers into emerging market FX, though the dollar’s broader reaction has been muted with most tariff rates aligning with prior proposals.

Nvidia, Bitcoin Rally Reflects Broader Risk Appetite

Risk sentiment remained firm across equities and crypto, with Nvidia reaching a historic $4 trillion valuation and Bitcoin nearing $112,000, reflecting broader investor interest in high-beta assets.

This underpins a “risk-on” environment that typically pressures the dollar, but the supportive U.S. data backdrop has helped the greenback stabilize near 97.416 on the DXY after a 0.2% decline Wednesday.

Outlook: Dollar Index Eyes 97.899 Pivot With Bias Neutral-Positive

The U.S. Dollar Index is showing resilience near key support levels, with minor support noted at 97.107 and deeper downside risks toward 96.377 if sellers regain momentum.

However, a decisive push above the 97.899 pivot could accelerate gains toward the 50-day moving average at 98.900. Treasury yields and labor market strength are underpinning near-term support, while traders will watch upcoming CPI data and additional Fed commentary for cues on direction.

For now, DXY bias remains neutral-positive, with positioning sensitive to both tariff developments and yield behavior in the sessions ahead.

More Information in our Economic Calendar.