Dollar steady as data point to higher-for-longer US interest rates

NEW YORK: The dollar was steady against its major peers on Thursday, as new data showed a still-tight US labor market, underpinning convictions that the Federal Reserve’s monetary policy tightening may be far from over.

The number of Americans filing new claims for unemployment benefits unexpectedly fell in the week ended Feb. 18, decreasing 3,000 to a seasonally-adjusted 192,000, according to the Labor Department.

The dollar index, which tracks the greenback against six major peers, modestly rose 0.02% to 104.52, slipping below the 104.68 high seen in late morning trading in Europe but little changed since yesterday’s session.

The index climbed 0.36% on Wednesday as minutes from the Fed’s Jan. 31-Feb. 1 meeting showed nearly all policymakers favored a slowing in the pace of interest rate hikes, but also indicated that curbing unacceptably high inflation would be the “key factor” in how much further the US central bank’s benchmark overnight interest rate would need to rise. That rate is currently in the 4.50%-4.75% range, having risen rapidly from the near-zero level in March 2022.

The euro fell 0.05% to $1.0600. It briefly touched $1.0586 in early trading, its lowest level since early January, largely unaffected by euro zone inflation data that came in a touch higher last month than previously estimated. That data confirmed that price growth is now well past its peak.

Elsewhere, sterling was slightly lower at $1.2041, and the yen was last trading at 134.79 per dollar.

Incoming Bank of Japan Governor Kazuo Ueda will speak in the country’s parliament on Friday and Monday, with investors looking for clues on how soon the BOJ could end its bond yield control policy.