Dollar falls as Fed signals possible interest rate cuts later this year. Despite concerns over U.S. tariffs, the Fed's decision reassured investors. Policymakers projected two quarter-point rate cuts, keeping their previous forecast unchanged.
On Wednesday, Fed kept its benchmark rate steady at 4.25%-4.50%. Chair Jerome Powell emphasized a cautious approach, stating, “We’re not in a hurry to move.” He stressed the need for more clarity on economic conditions before making adjustments.
The dollar index hovered near a five-month low at 103.41. Meanwhile, the euro remained steady at $1.09085, and the yen slightly strengthened to 148.36 per dollar. Traders expect the Fed to cut rates by 50 basis points this year, with the first move likely in July.
Sterling hit a four-month high of $1.3015 ahead of the Bank of England’s decision. The BoE is expected to keep rates on hold as it assesses the impact of tariffs. UK inflation remains above 2%, limiting the central bank’s room for easing.
Turkey’s lira tumbled to a record low of 42 per dollar before recovering slightly. Political tensions added pressure on the currency. The Australian dollar also weakened after a surprise drop in employment data, ending a strong labor market trend.
As global uncertainties persist, investors remain focused on central bank policies. The Fed’s cautious stance suggests rate cuts are likely, but inflation concerns could delay decisions.
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Dollar falls as Fed signals possible rate cuts in 2025. Markets expect easing to begin in July. Read more now!
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