The dollar index rose to 98.9 on Thursday, its highest level since December 9, as investors weighed mixed US economic data and reassessed the Federal Reserve’s policy trajectory. Initial jobless claims increased modestly to 208,000 last week, while job cuts fell to 35,553 in December, the lowest since July 2024, signaling a resilient labor market and easing fears of an imminent slowdown. The trade deficit narrowed sharply to $29.4 billion in October, the smallest since June 2009 and well below the $58.1 billion forecast, as imports fell to a 21-month low and exports reached a record high amid tariff-driven volatility. Attention now turns to Friday’s December employment report for further insights into labor market conditions. Markets currently price in a nearly 90% probability of the Fed holding rates steady, though traders still expect multiple rate cuts later this year.