U.S. Dollar Rises 0.2% as Fed Inflation Concerns Ease on Economic Data

The U.S. dollar strengthened on Wednesday (July 1), with the dollar index gaining 0.2% to 101.39, driven by recent economic data and renewed market expectations for potential rate hikes. Fed Chair Kevin Warsh signaled at the European Central Bank forum in Sintra that inflation risks have eased, while labor market data showed mixed signals: ADP reported 98,000 private jobs added in June, below the 118,000 forecast, but corporate layoffs announced in June fell 53% to 45,849, the lowest monthly level since December 2025.

Warsh refrained from providing forward guidance on rates but indicated the July FOMC meeting would bring a "spirited debate," noting that cost pressures remain elevated. The dollar gained support as markets view the Fed as prioritizing price stability amid robust labor market activity, while the euro weakened 0.4% to 1.1380.