The super dollar regained momentum and the sterling continued its sharp decline

However, at an event held on Thursday, the president of the Federal Reserve of St. Louis, James Bullard, showed a chart suggesting that even the most dovish assumptions would require rates to rise to at least 5%, while the strictest forecasts suggest rates above 7%. Interest rates are currently between 3.75% and 4%, after a series of aggressive increases.

Joe Perry, senior market analyst, FOREX.com and City Index in New York, also noted Fed Chairman Jerome Powell’s focus on the terminal rate rather than the pace of increases.

Although he expects the dollar to fall in the long term, the analyst sees the “opportunity for a bounce to 109.25 or so in the dollar index, and then turn around and continue lower.”

The dollar index, which measures the greenback’s performance against six currencies, recently rose 0.4% to 106.687. After hitting a 20-year high in late September, the index had lost more than 8% when it hit its latest intraday low on Tuesday.

Following the move in sterling on Thursday, Brad Bechtel, global head of FX at Jefferies, noted that lInvestors are concerned about UK Chancellor of the Exchequer Jeremy Hunt’s budget, which includes tax hikes and higher government spending in an effort to restore the country’s economic reputation and cool inflation.

Sterling was down 0.53% at $1.1850, after falling as much as 1.25%. The euro was up 0.26% against the pound at 87.43 pence.

The euro lost 0.30% against the dollar at $1.0364 after falling as much as 0.86% in the session. Earlier this week it had briefly touched its highest level since July at $1,048.

The greenback was up 0.4% against the Japanese currency at the time of writing on Thursday, at 140.165 yen, after falling earlier in the session.