The dollar flirted with a two-month peak on Thursday after Federal Reserve Chair Jerome Powell stuck to his patient approach on rates in a closely watched policy decision and offered little insight on when they could be lowered.
The greenback was also on track for its first monthly gain for the year, bolstered by a hawkish Fed and U.S. economic resilience, with uncertainty over tariffs beginning to ease given recent trade deals struck by Washington.
Against a basket of currencies, the dollar was last steady at 99.77 , not far from a two-month peak of 99.987 it hit in the previous session. The dollar index was set for a monthly gain of more than 3%.
U.S. President Donald Trump's chaotic tariffs and fears of the dollar's demise earlier this year had undermined the currency and given it the worst start to the year since the floating exchange rate period. Those worries have since abated, giving the dollar new life.
The latest push higher for the currency came on the back of the Fed's policy decision on Wednesday, after Powell reiterated it was still premature to ease rates.
The euro was last 0.25% higher at $1.1433, having slid to a seven-week low in the previous session. It was on track to lose 3% for the month.
Sterling languished near a 2-1/2-month low and last bought at $1.3248. It was similarly headed for a 3.5% monthly decline.
Traders have scaled back expectations for Fed cuts this year following Powell's comments, now pricing in about 35 basis points of easing by December.
Markets have also been faced with a blitz of tariff announcements ahead of an August 1 deadline for countries to secure trade deals or face steep levies.
South Korea became one of the latest nations to reach an agreement with the U.S., after Trump on Wednesday said Washington will charge a 15% tariff on imports from the key Asian ally.
The South Korean won strengthened on the news, rising 0.3% to 1,389.20 per dollar.
Trump on Wednesday also slapped a 50% tariff on most Brazilian goods and said the United States is still negotiating with India on trade.
BOJ MEET
Key for investors in Asia on Thursday will be the Bank of Japan's policy decision, where expectations are for the central bank to stand pat on rates.
Source: Reuters
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