The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against a basket of currencies, is trading stronger against major peers on Thursday, avoiding further downside pressure. Traders remain focused on the Federal Reserve's (Fed) latest policy stance, which reinforced expectations for two rate cuts in 2025. Despite stronger economic data, the index remains confined within the 103.00–104.00 range.
US Dollar rises as Fed keeps rates steady and geopolitical risks intensify
The Federal Reserve left interest rates unchanged, reaffirming projections for two rate cuts in 2025.
Fed Chair Jerome Powell downplayed the inflationary impact of tariffs, calling it a temporary effect, but acknowledged the difficulty in assessing its broader implications.
Recession risks have edged higher, though Powell indicated they remain relatively low for now.
US jobless claims came in lower than expected, pushing the US Dollar higher above 104.00.
Geopolitical uncertainty remains elevated, with no clear path to a ceasefire in Ukraine and tensions rising in Turkey and Gaza.
US bond yields are falling as investors seek safety in Treasuries amid economic and geopolitical uncertainty.
Expectations of lower yields once the Fed begins cutting rates are reinforcing demand for US bonds.
European markets show mixed sentiment, while US stocks trade cautiously following the Fed's policy decision.
Source: Fxstreet
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