Analysis: Dollar Stabilizes After Recent Ups and Downs
U.S. Dollar Resilience in the Aftermath of Fed’s Decision
The U.S. dollar showed resilience in European trade on Thursday, bouncing back after sharp losses in the previous session.
Following the Federal Reserve’s decision to maintain projections for interest rate cuts, the Dollar Index saw a marginal increase, standing at 103.065 by 04:20 ET (09:20 GMT).
Fed Sticks to Plan for Multiple Rate Cuts
The Federal Reserve, as expected, kept interest rates unchanged and reaffirmed plans for three rate cuts this year.
Despite concerns over inflation, the Fed did not alter its stance, leading to a decline in the greenback.
An over 70% chance of a rate cut in June is now being priced in by traders, according to the CME Fedwatch tool.
Swiss Franc Weakens Post-SNB Surprise
The Swiss franc faced a notable 0.9% drop to 0.8945 after the Swiss National Bank unexpectedly cut interest rates.
This move aimed at balancing the recent increase in the Swiss franc’s value, affecting exporters.
Other Global Economies Respond
The Indian rupee and Thai baht experienced minor fluctuations in response to regional economic indicators.
The Bank of England’s upcoming policy-setting meeting and positive labor market performance influenced currency movements.
Global Economic Trends Influence Market Sentiment
The Japanese yen and Australian dollar responded differently to U.S. monetary policies and local economic data.
While yen showed signs of resilience, the Australian dollar’s growth pattern was primarily driven by labor market insights.
