Dollar stabilizes ahead of key jobless data; SNB keeps rates unchanged

Investing.com - The U.S. dollar steadied Thursday, with traders cautious ahead of key economic data later in the day amid uncertainty over the extent of further easing by the Federal Reserve. 

At 03:00 ET (08:00 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, edged slightly higher to 97.552, after jumping 0.6% to a 2-week high overnight.

Fed speakers in focus

The dollar received a boost on Wednesday after Fed Chair Jerome Powell reiterated his cautious stance over further easing, saying that the central bank is in a "challenging situation" as it attempts to balance faster-than-expected inflation and weak job growth.

Some of these gains have been handed back early Thursday as traders turn their attention to a run of U.S. data which could offer a clearer direction on the Fed’s policy. 

Weekly jobless claims, due later in the session, will be crucial as policymakers cited a cooling labor market as the reason for the recent rate reduction.

An advance reading of second-quarter GDP is also expected later in the day, while Friday’s release of the personal consumption expenditures price index -- the Fed’s preferred inflation gauge -- will end the week with a bang.

There are also a plethora of Fed officials due to speak during the session, keeping traders on edge for fresh guidance.

“The dollar is a little stronger as investors reassess the immediacy of a U.S. slowdown and what it means for interest rates,” said analysts at ING, in a note.

“The focus will probably be on the weekly initial jobless claims data,” ING added, and “another low (dollar bullish) number is expected near 230k as this data continues to correct lower from 264k a fortnight ago. That spike was attributed to fraudulent claims in Texas.”

SNB keeps interest rates at zero

In Europe, EUR/USD traded largely flat at 1.1738, struggling for direction in the absence of significant eurozone economic data or ECB speakers.

“EUR/USD will be dragged around by U.S. events today. A move under 1.1725 in EUR/USD could damage the short-term picture and see the correction extend towards the 1.1660 area,” said ING.

GBP/USD traded mostly unchanged, while USD/CHF gained 0.1% to 0.7958 after the Swiss National Bank held its key interest rate at zero, as widely expected.

The decision marks the first hold in seven meetings by the SNB, after it started reducing borrowing costs in March 2024, and follows the decision of the Trump administration to impose a 39% tariff on Swiss goods exports to the United States in August.

BoJ minutes in spotlight 

Elsewhere, USD/JPY fell 0.1% to 148.69, retreating after jumping nearly 1% overnight.

The Bank of Japan’s July policy meeting minutes showed that some policymakers argued for considering rate hikes in the future, highlighting divisions within the board. 

USD/CNY dropped 0.1% to 7.1266, while AUD/USD gained 0.2% to 0.6592, boosted by hotter than expected Australian inflation data, released earlier in the week,