The US dollar is doing well because investors are still surprised by better-than-expected economic statistics, which boosts their confidence in the US economy. Strong US orders for durable goods and services activity both suggest to a solid economic outlook, which helps the currency stay strong. The ISM Services PMI, which measures growth in the services sector, rose to 53.9, which was higher than expected.
Investors are quite interested in what the Federal Reserve will do next, and the most recent data backs up the idea that the Fed is not in a hurry to lower interest rates. CME FedWatch shows that the chances of a rate cut in September are getting smaller because inflation is still above the 2 percent objective and the labor situation is still strong. This assumption is making the dollar stronger than other currencies, especially the euro and pound.
The Dollar is Stronger than the GBP and EUR
The British pound is still under pressure because UK retail sales are poor and the political situation is still unclear. At the same time, the euro is having trouble because German manufacturing data is slow. The GBP and EUR are also having trouble keeping up with the growing appeal of the US dollar. The EUR/USD rate is already below 1.09, and the GBP/USD rate is around 1.27.
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