The dollar index hovered around 99.6 on Thursday, holding near a seven-week low as an agreement to partially reopen the Strait of Hormuz pressured oil prices, easing inflation concerns and curbing expectations for more aggressive Federal Reserve tightening. Iran and Oman agreed to establish a shipping corridor through the strait, bolstering hopes for improved Middle Eastern energy supply. In response, investors pared back their Fed outlook, now pricing in just one additional rate hike by year-end, down from two anticipated as recently as last week.
On the data front, ADP figures showed the US economy added only 44,000 private-sector jobs in July, the weakest monthly gain since January and well below the 70,000 forecast. Separately, Fed Governor Lisa Cook reiterated that she is prepared to support further rate increases if inflation does not continue to moderate, warning that the central bank may have limited room to delay action while working to bring inflation back to its 2% target.
