The U.S. dollar experienced a decline on Thursday, influenced by the Federal Reserve’s recent indications of potential interest rate cuts later in the year. For further details on this development, you can read the full article by Ankur Banerjee here. The Fed’s decision to maintain its benchmark overnight rate between 4.25% and 4.50% highlights the challenges policymakers face amid ongoing economic uncertainties and the potential impact of U.S. tariffs.
Read also: U.S. Dollar Rebounds Amid Tariff Confusion and Market Volatility
According to data from the IndexBox platform, the dollar index remained steady at 103.41 during early trading, hovering near a five-month low. This comes as traders anticipate 66 basis points of easing by the Fed this year, with a rate cut in July already factored in. The euro remained stable at $1.09085, while the Japanese yen strengthened slightly to 148.36 per dollar, following the Bank of Japan’s decision to hold rates steady amidst global economic uncertainties.
Meanwhile, the British pound surged to a four-month high of $1.3015 ahead of the Bank of England’s policy decision. The BoE is expected to maintain current rates as it assesses the economic impact of U.S. tariffs. Despite inflation remaining above the 2% target, the BoE’s rate cuts have been less aggressive compared to the European Central Bank and the Fed, contributing to the UK’s sluggish economic growth.
Elsewhere, Turkey’s lira saw a dramatic drop to a record low of 42 per dollar before recovering most of its losses, closing at 37.665 per dollar. This volatility followed the detention of President Tayyip Erdogan’s main political rival. In Australia, the dollar fell by 0.35% to $0.6335 after a surprising decline in employment figures, although the jobless rate remained steady. The Reserve Bank of Australia recently cut interest rates for the first time in four years, but further easing remains uncertain due to the robust labor market potentially fueling inflation.
