The dollar index continues to hover around the 98.50 mark on Thursday, according to reports from Business Standard, with the currency maintaining this level following recent US economic data that reinforced inflationary pressures and expectations for higher interest rates. The dollar's stability comes as markets await key developments from international diplomatic meetings, with US stock index futures moderately higher in the European session. The USD Index marked a second straight daily rise before holding near 98.50 as focus turned to April Import and Export Price Indices, Retail Sales, and weekly Initial Jobless Claims. However, the greenback has moved little after Reuters cited a White House official stating that the Trump-Xi meeting was "good" and both leaders discussed ways to enhance economic cooperation. Markets appeared to shrug off hotter-than-expected U.S. producer price index data, with analysts at Vital Knowledge suggesting the rise in PPI may be a function of the Iran war, meaning readings may cool once a deal is reached to end the conflict.
US Producer Price Index (PPI) jumped by 6.0% year-on-year in April, as reported by Business Standard, following the 4.3% increase seen in March. According to data from the US Bureau of Labor Statistics, this represents the fastest annual pace of wholesale inflation in four years and exceeded the 4.9% forecast. The accelerating inflationary pressures, driven by higher energy prices, have effectively ruled out any possibility of a rate cut in the near term. This marks a significant escalation from the 6% producer inflation surprise in May 2025 that initially pushed the Dollar Index toward 98.50, with current core inflation still stubbornly above 3.5%. On a monthly basis, PPI rose 1.4%, doubling the previous month's 0.7% and far exceeding the anticipated 0.5% increase. April retail sales ticked up 0.5% month-on-month, matching the consensus estimate but decelerating from March's 1.6% rise, as reported by the U.S. Census Bureau. The number of Americans filing for initial jobless claims increased 211,000 in the past week, higher than the expected 205,000, with continuing claims climbing 24,000 to 1.782 million.
Investors are maintaining a watchfully cautious stance ahead of the US President Donald Trump-Chinese President Xi Jinping summit in Beijing, as reported by Business Standard. According to China's Xinhua, Trump was told that mishandling the Taiwan issue could lead to a clash or conflict and place relations in "a very dangerous place". The agenda is expected to include the US conflict with Iran, trade, the Ukraine crisis, and the Korean peninsula. However, the latest developments show that Trump hailed "extremely positive and constructive discussions" with Xi Jinping during his high-stakes trip to China, speaking at a state banquet in Beijing. Trump described Xi as a "friend" and his welcome in China as "magnificent," with talks so far being "all good" for both countries. Trump invited Xi to visit the U.S. in September, saying "We have a chance to create a future of greater cooperation and prosperity." Xi said he had an "in-depth exchange of views" with Trump, stressing that the two nations should "become partners, not rivals" -- although he noted that only through "mutual respect" can these ties be stable. Neither Trump nor Xi entered into specifics around their conversations, which are expected to revolve around major issues like trade, Taiwan, and artificial intelligence. Discussions included broader market access for American businesses in China, increased Chinese investment in the United States, and higher Chinese purchases of US agricultural products, as reported by Reuters. News agency Xinhua reported on Thursday that Xi Jinping told US CEOs accompanying Trump on a Beijing visit that China's door would only open wider, and that he believed US companies would have more opportunities in the country. Xi met with the delegation of CEOs at the Great Hall of the People, which included Elon Musk, Jensen Huang of Nvidia, and Tim Cook of Apple, with Trump stating on Tuesday that he would ask Xi to "open up" China when they met.
West Texas Intermediate (WTI) Oil rises a further 0.51% on Thursday to around $97.45, supported by persistent concerns surrounding global supply, according to latest market data. Data from the Energy Information Administration (EIA) showed that Crude Oil flows through the Strait of Hormuz had already declined during the first quarter following the escalation of regional tensions. This rise in Oil prices could support the Canadian Dollar (CAD), given that Canada remains the largest Crude exporter to the United States. USD/CAD trades around 1.3705 on Thursday at the time of redaction, virtually unchanged on the day, as markets price in mixed effects following news from the US-China summit. Brent crude futures, the global oil benchmark, were last down 0.6% to $105.05 a barrel, compared to a pre-war level of roughly $70 a barrel, with oil prices oscillating around the flatline due to continued shuttering of the Strait of Hormuz. The world's economy faces a murky outlook due to the continued shuttering of the Strait of Hormuz, a vital waterway off Iran's southern coast through which roughly a fifth of global oil flows. Markets have eliminated expectations for 2026 Fed rate cuts, now shifting focus toward a potential year-end hike as the hawkish policy stance is reinforced by the persistent inflationary pressures.
Wall Street opened higher on Thursday, with the S&P 500 adding 0.3% to 7,466.33 points, the tech-heavy Nasdaq Composite climbing 0.2% to 26,456.07 points, and the blue-chip Dow Jones Industrial Average gaining 0.8% to 50,078.43 points, as reported by Investing.com. The S&P and Nasdaq rose on Wednesday to end at record highs, while the Dow slipped marginally. The U.S. has cleared about 10 Chinese companies to purchase Nvidia's second-most powerful AI chip, the H200, although a delivery has yet to be made, with Nvidia CEO Jensen Huang accompanying Trump to China, raising expectations that a breakthrough could be reached to unlock sales of the H200 in the country. U.S. Treasury Secretary Scott Bessent told CNBC that he expected an announcement about large Chinese orders for Boeing's aircraft during Trump's visit, with shares of Boeing higher following the comments. The U.S. Senate confirmed Kevin Warsh as chair of the Federal Reserve on Wednesday, elevating him to the helm of the central bank just as policymakers are grappling with price pressures that may make it harder to justify delivering rapid and aggressive rate cuts frequently demanded by Trump.
