Market Update: Dollar Weakens on Rate Cut Expectations
US Dollar Hits Two-Week Low
The dollar reached a two-week low on Thursday due to economic data supporting expectations of imminent rate cuts in the United States. Meanwhile, the yen remained stable below the crucial 152 level.
Focus on Fed Rate Cuts
An unexpected slowdown in U.S. services growth fueled speculations of interest rate reductions, causing the dollar to slip on Wednesday. Federal Reserve officials, including Jerome Powell, emphasized the need for further discussion and data before implementing rate cuts, which are anticipated in June.
Market Reactions
The dollar index, measuring the currency against six peers, dropped by 0.25% to 103.96, hitting its lowest point since March 21. Futures pricing indicated a 60% probability of a Fed rate cut in June.
Upcoming Labor Data
All eyes are on the U.S. labor report scheduled for Friday, with economists estimating the addition of 200,000 jobs in March. The market anticipates a significant reaction based on the report’s results.
Yen’s Position
The yen hovered near a 34-year low against the dollar despite the Bank of Japan’s policy shift. The rates disparity between the U.S. and Japan has led to Japanese investors keeping their funds overseas, limiting support for the yen.
Swiss Franc and Euro Movements
The Swiss franc depreciated against the dollar following lower-than-expected consumer price index data. The euro remained stable at $1.087 amid soft European inflation figures.
Cryptocurrency Updates
Bitcoin and ether witnessed positive movements, with bitcoin rising by 2.74% to $67,526.75 and ether gaining 1.87% to $3,368.5. Chinese markets were closed for a holiday.
Australian and New Zealand Dollars
The Australian dollar surged above its 200-day moving average, reaching a two-week high at $0.66180. The New Zealand dollar also strengthened, trading 0.52% higher at $0.6041.
