Sep 26 2024: The U.S. dollar edged slightly lower on Thursday, consolidating after a sharp rebound the previous day, as traders await more speeches from key Federal Reserve policymakers.
As of 04:40 ET (08:40 GMT), the Dollar Index, which measures the greenback against six other major currencies, dipped 0.1% to 100.565, following a nearly 0.6% jump on Wednesday, marking its biggest one-day rise since June 7.
Dollar Eyes Fed Officials’ Commentary
After a strong overnight rebound, the dollar stabilized on Thursday as traders reassessed how aggressive future U.S. rate cuts might be, following the Federal Reserve’s earlier 50 basis-point reduction in its rate-cutting cycle.
Several Fed officials are scheduled to speak later on Thursday, and traders will be watching closely for further insights, as messages following the Fed’s last meeting have been somewhat mixed.
Fed Governor Adriana Kugler expressed strong support for the recent 50 basis-point rate cut, while Governor Michelle Bowman warned against aggressive cuts, and Atlanta Fed President Raphael Bostic suggested there was no rush to lower rates rapidly.
“There is a long list of Fed speakers today, including Chair Powell’s pre-recorded remarks, and additional comments from Collins, Bowman, Williams, Barr, Cook, and Kashkari. These could provide more clarity on each member’s views,” analysts at ING noted.
Additionally, key U.S. economic data such as second-quarter GDP, weekly jobless claims, and August’s durable goods orders are due for release.
Euro Holds Steady
In Europe, EUR/USD traded slightly higher at 1.1132 after pulling back from a 1.1214 peak, its highest level since July of last year. With a quiet eurozone data calendar, the euro remains elevated.
“We could see more range-bound swings between 1.110 and 1.120 unless U.S. data offers a clearer direction. The current 2-year EURswap rate gap remains tighter at -95bp, which still favors the euro,” ING analysts commented.
Pound and Swiss Franc Movement
GBP/USD edged 0.1% higher to 1.3342 after touching 1.3430 on Wednesday, its highest since February 2022.
USD/CHF fell 0.2% to 0.8488 after the Swiss National Bank (SNB) cut its benchmark interest rate by 25 basis points. While the move was largely expected, some analysts had anticipated a bigger cut as inflation in Switzerland stood at 1.1%, the lowest rate among G10 economies.
Yuan Supported by Chinese Stimulus
USD/CNY dropped 0.2% to 7.0187, approaching its lowest level since May 2023 after China unveiled a series of major stimulus measures aimed at boosting economic growth.
USD/JPY rose 0.1% to 144.87, moving further from its 2024 lows ahead of Japan’s LDP elections, which could impact the Bank of Japan’s monetary policy outlook. Analysts expect a leadership change could delay the central bank’s plans to raise interest rates in the near future.
