The US Dollar Index rebounded to 97.5 on Thursday, reversing earlier losses after fresh data underscored continued strength in the labor market despite lingering trade tensions. Initial jobless claims fell for the sixth straight week, dropping to 217,000 from 221,000 and defying expectations for a rise to 227,000. On the trade front, reports suggested that the US and EU are edging closer to a deal, with talks focused on implementing a baseline 15% tariff on EU goods. Meanwhile, Treasury Secretary Scott Bessent indicated that the current tariff truce with China is likely to be extended beyond its August 12 deadline. In terms of monetary policy, the Fed is expected to remain cautious on further rate cuts, as concerns grow that tariffs could fuel inflation. Adding to the tension, President Trump — a vocal critic of Fed Chair Powell — is set to make a visit to the central bank, a surprise move likely to further strain relations between the Fed and the administration.