USD strengthens on widening US wealth gap, Delta earnings highlight

The US dollar index gained 0.2% to 103.45 as Delta Airlines earnings revealed stark economic divergence between wealthy and average American consumers. Delta reported record premium cabin revenue growth of 8%, while main cabin sales remained flat, suggesting luxury spending remains robust despite broader economic concerns. This two-speed economy dynamic supports the Federal Reserve's higher-for-longer rate stance, as wealthy consumer spending continues driving inflation. The data reinforces recent retail sales patterns showing strength in luxury goods versus weakness in discount retailers. EUR/USD slipped 0.15% to 1.0920, while USD/JPY advanced 0.3% to 149.80 as traders price in sustained dollar strength. Technical indicators show the DXY approaching resistance at 103.80, with support established at 103.00. The widening wealth gap could complicate the Fed's monetary policy decisions, potentially delaying rate cuts and supporting continued dollar appreciation through Q1 2026.