Home Business News The dollar regains strength ahead of Fed commentaries

The dollar regains strength ahead of Fed commentaries

8th May 24 11:55 am

The dollar continued to regain some strength against a basket of major currencies, particularly against the Japanese yen, which has weakened past the key support level of 155 (USD/JPY).

All eyes are on the Federal Reserve and the timing and pace of its potential rate cuts. Markets are currently expecting rates to decrease starting September after recent weaker-than-expected U.S. jobs data.

However, Federal Reserve members remain cautious. Minneapolis Fed President Neel Kashkari said on Tuesday that he expects the central bank to stay put for an extended period until there is clear evidence of disinflation and did not rule out a hike if inflation accelerates.

As a result, traders could look forward to new Fed members commentary to gauge the potential next steps. Hawkish comments could push bond yields to the upside.

The market could also see increased volatility on Friday with the release of the Michigan Consumer Sentiment Index. The market expects a reading for May to decline to 76 points from April’s 77.2 points. If the data reveals a decline in the Sentiment Index beyond the market consensus the dollar could come under pressure.

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