The U.S. dollar steadied near a six-month peak in early European trade Thursday, boosted by signs of a resilient U.S. economy even as the global outlook weakened.

At 03:00 ET (07:00 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% higher to 104.897, having earlier reached just short of 105, its highest level since mid-March.

U.S. economy shows resilience
Data released Wednesday showed that U.S. service sector activity grew more than expected in August, with a gauge of prices in the sector also rising further.

The readings fueled concerns that inflation will remain sticky in the near-term, eliciting a continued hawkish outlook from the Federal Reserve.

Unemployment data later in the session is expected to show that the U.S. labor market remains healthy, with initial jobless claims expected to rise slightly to 235,000 from 228,000 the prior week.

Also of interest Thursday will be the plethora of Fed officials due to speak later at a fintech conference hosted by the Philly Fed, before they enter the blackout period ahead of their meeting later this month.

Weak German industrial production weighs on euro
Elsewhere, the economic news looks a lot less impressive.

EUR/USD fell 0.1% to 1.0719, near its lowest level since June, after German industrial production fell 0.8% in July compared to the previous month, more than the expected 0.5% drop, underlining the challenges faced by manufacturing in Europe’s largest economy.

European Central Bank policymakers were keen to warn investors on Wednesday that the central bank could still hike interest rates again, in what would be its 10th consecutive rise, when they meet next week.

However, with economic activity deteriorating across the region, expectations are rising that the Governing Council will choose to pause, even if it keeps the door open to further moves.

British house prices slump
GBP/USD fell 0.1% to 1.2502, not far away from the three-month low seen in the previous session, after data from Halifax, the U.K.’s largest lender, showed that U.K. house prices fell 4.6% on an annual basis in August.

This suggests that prices are falling at the fastest rate since the aftermath of the financial crisis, and things are likely to get worse with Halifax expecting further downward prices on property prices.

Weak trade data weighs on Chinese yuan
USD/CNY rose 0.1% to 7.3254, with the yuan falling to its weakest level since November 2022, after weak economic data from China also dented sentiment towards Asian markets, with both imports and exports in the country continuing to decline through August, albeit at a slower-than-expected rate.

USD/JPY fell 0.1% to 147.50, with the yen near a 10-month low, weighed by two Bank of Japan officials reiterating that the bank is likely to maintain its ultra-dovish policy in the near-term.