He American dollar began the trading day with a slight rebound, recovering after the losses of the previous day. This happens after the Federal Reserve decided to maintain its projections of interest rate cuts for this year.
Meanwhile, the Swiss franc is experiencing an unexpected decline due to a rate cut by the Swiss National Bank.
Thus, the dollar index, which tracks the evolution of this currency with respect to a basket of six other major currencies, registers a slight increase to 103.065, after a drop of more than 0.5% the previous day.
The Fed maintains its forecast of three rate cuts this year, which was in line with market expectations. However, the rigidity of inflation data had raised fears that the Fed would revise these forecasts downwards. Although the Fed did not adopt a more hawkish tone, causing the dollar to fall.
Dollar vs. other currencies
Traders now believe there is a more than 70% chance the Fed will cut rates by 25 basis points in June, according to CME’s Fedwatch tool. Goldman Sachs foresees cuts in June, September and December, making a total of three cuts in 2024.
On the other hand, the Swiss franc is experiencing a decline after the Swiss National Bank cut its benchmark interest rates by 25 basis points to 1.5%, becoming the first major central bank to do so in this cycle. This measure is probably aimed at curbing the recent appreciation of the Swiss franc.
Elsewhere, the Central Bank of Norway left its benchmark interest rates unchanged at 4.50%, as analysts had expected. Meanwhile, the Bank of England prepares for its meeting, with expectations of maintaining interest ratesalthough inflation in the UK has slowed, which could lead to cuts in the coming months.
In the currency market, the yen moves away from four-month lows, with the USD/JPY pair falling 0.2%. The prospects for an interest rate cut in the United States and a more aggressive Bank of Japan benefits to the yen. Meanwhile, the AUD/USD pair is up 0.4%, boosted by a positive labor market reading in Australia, indicating a decline in unemployment to six-month lows.
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
