Investing.com – The US dollar fell on Thursday, holding on after a sharp rebound overnight ahead of more speeches from key policymakers at the Federal Reserve.
At 04:40 EDT (08:40 GMT), the dollar index, which tracks the greenback against a basket of six other currencies, fell 0.1% to 100.565, after a nearly 0.6% jump on Wednesday, its biggest gain. For one day. Since June 7.
Dollar eyes Fed officials
The US dollar stabilized on Thursday after rebounding strongly overnight as traders reassessed the strength of future cuts in US interest rates following the Federal Reserve starting its rate cutting cycle with a massive 50 basis point cut earlier this month.
A number of Fed officials are scheduled to speak later on Thursday, and traders will be looking for more evidence as the message following the last Fed meeting was a bit inconsistent.
The Fed governor said she “strongly supports” the decision to cut interest rates by half a point to start an easing cycle, but the Fed governor warned against sharp rate cuts, and the head of the Atlanta Fed said the central bank does not need a “mad dash.” “To lower interest rates. Lower rates.
“On the Fed side, Chairman Powell will provide pre-recorded opening remarks, and there is a long list of other speakers: Collins, Bowman, Williams, Barr, Cook, and Kashkari. “There should be some additional color in the presentation,” analysts at ING said in a note. Dot Plot for each member.
The slate of economic data is also full on Thursday, with the latest Q2 and weekly editions and August orders scheduled for release.
The euro is still at a high level
In Europe, the euro rose slightly to 1.1132, after falling sharply from 1.1214, the highest level not seen since July of last year, with the euro zone data calendar calming down.
“We are likely to see further intra-range volatility around the 1,110-1,120 area in the near term unless US data provides a clearer direction to the markets. The gap in the two-year EUR/USD swap rate which was less than -100 pips,” ING said. The basis (now at -95 basis points) continues to conflict with a significant correction in the pair.”
The index rose 0.1% to 1.3342 after rising to 1.3430 on Wednesday for the first time since February 2022.
It fell 0.2% to 0.8488 after cutting its benchmark interest rate by 25 basis points earlier on Thursday.
While the move was largely expected, the third straight cut, there were some eyeing a bigger cut as the country’s inflation rate reached 1.1% last month, the slowest pace among the G10 economies and roughly the middle of last month. The SNB’s target range is 0%-2%.
The yuan benefits from Chinese stimulus
The Australian share index fell 0.2% to 7.0187, near its lowest level since May 2023, after Beijing unveiled a series of major stimulus measures aimed at supporting growth.
It rose 0.1% to 144.87, moving further away from its 2024 lows ahead of Friday’s Liberal Democratic Party election, which is set to determine the country’s next prime minister.
Analysts expect the change in leadership in Japan to thwart the Bank of Japan’s plans to raise interest rates in the near term.
Comments are closed, but trackbacks and pingbacks are open.