Investing.com – The US dollar fell on Thursday, consolidating after a sharp recovery ahead of further speeches from key Federal Reserve policymakers.
At 04:40 ET (08:40 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was trading 0.1% lower at 100.565, after jumping nearly 0.6% on Wednesday, the biggest single-day gain since June 7.
The dollar is looking at Fed officials
The US dollar stabilized on Thursday after a strong overnight rebound as traders reassessed how aggressive future US rate cuts would be after the Federal Reserve began its rate-cutting cycle earlier this month with a big cut of 50 basis points.
There will be a series of Fed officials speaking later Thursday, and traders will be looking for more clues as the message after the last Fed meeting has been somewhat inconsistent.
The Fed governor said she “strongly supported” the decision to cut rates by half a point to kick-start the easing cycle, but the Fed governor warned of sharp rate cuts and the Atlanta Fed president said the central bank does not have to make a “crazy leap” to lower interest rates. lower rates.
“On the Fedspeak side, Chairman Powell will deliver pre-recorded opening remarks, and there is a long list of other speakers: Collins, Bowman, Williams, Barr, Cook, and Kashkari. There should be some extra color in each member’s Dot Plot entry,” ING analysts said in a note.
Economic data is also full on Thursday, including the latest printed numbers for the second quarter, the weekly release and the release of August orders.
The euro remains at a high level
In Europe, yields edged higher to 1.1132 after a sharp pullback from 1.1214, a high not seen since July last year when the Eurozone data calendar was quiet.
“We are likely to see some more swings around the 1,110-1,120 area in the near term unless US data provides clearer direction for the markets. A two-year EUR:USD swap rate gap below -100 bp (now at -95 bp) still argues against a major correction in the pair,” ING said.
traded 0.1% higher at 1.3342, after rising to 1.3430 on Wednesday for the first time since February 2022.
fell 0.2% to 0.8488 after interest rates were cut by 25 basis points earlier Thursday.
While the move was largely expected, and marks the third straight cut, there were some who were looking for an even bigger cut as the country’s inflation rate stood at 1.1% last month, the slowest pace among the economies of the G10 and almost in the middle of the month. the SNB’s target range of 0%-2%.
Yuan benefits from Chinese stimulus measures
traded 0.2% lower at 7.0187, near the lowest level since May 2023, after Beijing unveiled a series of major stimulus measures aimed at boosting growth.
rose 0.1% to 144.87, further from the 2024 low before Friday’s LDP elections, which will determine the country’s next prime minister.
Analysts expect a leadership change in Japan to hamper the Bank of Japan’s plans to raise interest rates in the near term.
