On Thursday, the US Dollar (USD) softened against major currencies, including the Australian Dollar (AUD), Canadian Dollar (CAD), and British Pound (GBP), despite stronger-than-expected US jobless claims data and persistent geopolitical tensions in the Middle East [1][2][3]. The AUD/USD traded around 0.6940, up 0.16% on the day, supported by the weaker USD and limited demand for safe-haven assets amid ongoing US-Iran exchanges, which investors view as positioning ahead of potential peace talks [1]. The US Dollar Index (DXY) was down 0.11% near 100.95 at the time of press [1]. US Initial Jobless Claims fell to 215K for the week ending July 4, down from 217K previously and below expectations of 218K, while Continuing Jobless Claims edged up to 1.814 million [1][3]. The four-week average eased to 218.75K from 222.5K [3]. Despite these positive labor market signals, the Greenback struggled to gain traction, as the latest Federal Reserve (Fed) Minutes revealed policymakers remain divided on inflation risks and the future path of monetary policy, reinforcing expectations of future policy easing [1][3]. Some Fed officials reportedly saw a case for a rate hike at the June meeting, but overall sentiment remains cautious [3].
The CAD was flat on Thursday but modestly firmer versus the USD for the week, making it a mild outperformer since Monday [2]. Scotiabank strategists noted that much bad news is already priced into the CAD, and improving Canadian economic data, along with stabilizing front-end spreads, support a more constructive near-term view [2]. Technical analysis suggests the USD remains extremely overbought against the CAD, with firm resistance at the 1.4250/00 range and a break under 1.4150 seen as a bearish signal [2].
The GBP/USD traded higher near the 1.3400 area, as the USD failed to find support from strong jobless claims data and hawkish FOMC signals [3]. The Bank of England (BoE) maintains a cautious outlook, warning that inflation could remain elevated due to energy prices, while the UK labor market is loosening and growth remains fragile [3]. Technical analysis shows GBP/USD holding above key moving averages and horizontal supports, with a constructive near-term bias and resistance at 1.3411 and 1.3422 [3].
In Australia, RBA Assistant Governor Sarah Hunter reiterated the central bank's readiness to act if necessary to return inflation to target, limiting expectations of a near-term easing cycle [1]. However, subdued inflation in China, Australia's largest trading partner, remains a source of caution for the AUD's medium-term outlook [1].
CONCLUSION
The US Dollar's weakness, despite strong jobless claims and divided Fed policy signals, has supported gains in the AUD, CAD, and GBP. Technical and fundamental factors across these currencies point to a constructive near-term outlook, though caution persists due to geopolitical tensions and inflation risks. Market sentiment remains moderately positive for non-USD majors, with the USD facing resistance and limited upside.