The dollar strengthened after President Donald Trump announced a major breakthrough in U.S.-UK trade negotiations. Trump highlighted significant economic gains, projecting $6 billion in external revenue from new 10% tariffs and an additional $5 billion from increased exports. Trump further signaled potential progress in broader trade talks, notably hinting that a U.S.-China agreement might soon materialize. Bank of England Governor Andrew Bailey echoed optimism, noting the deal would reduce market uncertainty.

Trump Criticizes Fed's Powell, Calls for Rate Cuts

Despite upbeat trade comments, Trump sharply criticized Federal Reserve Chair Jerome Powell, stating Powell "doesn't have a clue" about the economy. Trump argued the Fed’s hesitation contrasts sharply with active rate cuts from the Bank of England and People's Bank of China, insisting immediate U.S. rate cuts would serve as "jet fuel" for economic growth.

Mixed US Economic Data Reinforces Caution

Economic data reinforced ongoing caution regarding U.S. growth prospects. Weekly initial jobless claims were 228,000, slightly better than forecasts but reflecting labor market tightness. The New York Fed reported declining labor market and household earnings expectations for April, though inflation expectations remained stable near-term at 3.6%, with longer-term expectations ticking up slightly to 3.2%, highlighting the Fed’s policy challenges amid persistent inflation pressures.

Market Outlook:
Dollar strengthens amid positive trade sentiment, tempered by ongoing Fed policy uncertainty and mixed economic signals.