The US dollar rose against major peers on Friday, following its best single-day performance in three weeks. The Federal Reserve indicated no rush to cut interest rates, which lifted the dollar index measure by 0.21% to 104.01. This comes after a steady decline from its highest level since late 2022.
The decline in the US dollar was partly due to concerns over President Donald Trump’s global trade tariffs, which have been causing anxiety among policymakers and investors. The Aussie and New Zealand dollars, however, suffered larger losses on Thursday as they are considered risk-sensitive currencies.
The Fed has signaled two quarter-point cuts for later this year, but held rates steady on Wednesday. Fed Chair Jerome Powell underscored the challenge in navigating Trump’s erratic tariffs and their potential impact on the domestic economy. A new round of reciprocal levies is expected on April 2.
Analysts believe that market players may trim back on short-selling US dollars ahead of the tariff announcement, leading to a more neutral position. The euro slipped 0.18% to $1.0831, while sterling eased 0.19% to $1.2943.
Source: https://www.reuters.com/markets/currencies/us-dollar-stands-tall-after-fed-signals-no-rush-cut-rates-2025-03-21