Dollar stabilizes as markets wait for U.S. jobs data, Fed rate reduction signs

(MENAFN) On Thursday, the dollar stabilized below recent highs, with investors eagerly anticipating the release of US jobs data and finding reassurance in Federal Reserve Chairman Jerome Powell's statements. Powell's remarks were interpreted as signaling a willingness to consider lowering interest rates later this year, which buoyed market sentiment. The Japanese yen, on the other hand, remained range-bound, largely unmoved from the 151.56 level it has hovered around for the past three weeks. This stability is attributed to the possibility of intervention by Japanese authorities to maintain exchange rate stability.

Meanwhile, the euro saw a 0.6 percent increase, reclaiming a position within the middle of its one-year range against the dollar at $1.0837. European inflation figures released on Wednesday came in lower than expected, fueling expectations of a potential interest rate cut by the European Central Bank in June.

Powell's comments struck a balanced tone, emphasizing that future policy decisions will be data-dependent. Market participants paid close attention to his assertion that recent economic data has not significantly altered the overall outlook. Analysts at ANZ noted, "The speech generally confirmed that the Fed is going to cut interest rates this year, and that the timing will be determined according to the data. We believe that by July the Fed will likely have enough confidence to start cutting interest rates." This assessment underscores the prevailing sentiment among investors regarding the Fed's stance on monetary policy and its potential implications for the dollar's performance in the coming months.

MENAFN04042024000045015682ID1108057796