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USD continues to dominate the market

by Thea Coates Finance Reporter
19th Mar 24 12:43 pm

The dollar index continued to rise toward its highest level since the beginning of the month.

The currency is driven by diminished expectations regarding interest rate cuts from the Federal Reserve, on the back of stronger-than-expected US inflation data.

Market participants still widely anticipate the Fed to maintain rates at 5.5% this week. However, traders still face uncertainties about the timing and extent of potential monetary easing measures by the U.S. central bank this year and could look forward to Jerome Powell’s speech and the Fed’s projections.

A hawkish stance from the Federal Reserve could push the dollar to new highs against other currencies. The dollar also rose against the yen which saw the Bank of Japan end a long period of negative rates amid increasing wages and inflation.

While the Bank of Japan (BOJ) abandoned yield curve control it could maintain an accommodative policy which could continue to weaken the yen against the dollar.

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