U.S. Dollar Strengthens Following Fed's Rate Decision
The U.S. dollar gained momentum against major global currencies on Wednesday after the Federal Reserve decided to hold interest rates steady, as widely anticipated by markets. However, the Fed refrained from providing clear signals about potential rate cuts in the near future, opting instead for a cautious wait-and-see approach.
In his post-meeting press conference, Fed Chair Jerome Powell emphasized the need for more data to evaluate the effects of economic policies and maintain the central bank’s 2% inflation target. "We remain cautious and patient in our decisions, as it’s too early to determine the broader impact of recent policies," Powell stated.
The dollar index, which tracks the greenback's performance against a basket of currencies, rose slightly by 0.09%, closing at 108.02. It marked a recovery from the one-month low of 106.96 reached earlier in the week due to global market uncertainties.
Against specific currencies, the U.S. dollar showed mixed performance:
- It strengthened 0.35% against the Swiss franc, trading at 0.907.
- The dollar weakened against the Japanese yen, slipping 0.17% to 155.25.
- The euro fell 0.17% to $1.041.
Meanwhile, Canada’s central bank cut its policy rate to 3%, citing potential risks from trade tensions. The Canadian dollar weakened slightly, with one U.S. dollar trading at 1.44 Canadian dollars.
In the cryptocurrency market, Bitcoin surged 3.73%, reaching $104,067.20, while Ethereum rose 2.71%, trading at $3,135.41.
Market analysts suggest the Federal Reserve's cautious stance is supporting the dollar's relative stability. “The U.S. economy remains robust compared to global peers, giving the Fed little urgency to ease monetary policy further,” noted Juan Perez, a trading director at Monex USA.
As markets digest the Fed’s decision, attention shifts to upcoming economic data and central bank actions worldwide, including the European Central Bank's rate announcement.
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