Dollar holds firm, New Zealand dollar rises, pound sterling remains stable

(MENAFN) The dollar maintained its position near its highest level in a week on Thursday, following a notable uptick in its performance against other major currencies. This surge came in the wake of the release of minutes from the Federal Reserve's latest meeting, which unveiled the willingness of certain officials to consider raising interest rates.

Meanwhile, the New Zealand dollar experienced continued appreciation, propelled by an unexpected uptick in domestic retail sales. This unexpected economic strength prompted the central bank to revise its guidance on monetary policy tightening, consequently reducing bets on a potential interest rate cut.

In contrast, the pound sterling exhibited stability after reaching its highest level in a month, driven by inflation figures surpassing expectations. Additionally, support for the British currency was bolstered by the announcement of parliamentary elections scheduled for the fourth of July.

The dollar index, a gauge of the greenback's performance against a basket of six major currencies, remained relatively unchanged, hovering at 104.85 points. This stability follows a modest gain of 0.28 percent recorded in the previous session.

Analysis of the Federal Reserve's meeting minutes revealed a nuanced outlook among officials regarding inflation dynamics. While there remains confidence that price pressures will gradually ease, discussions also underscored the potential need for tightening monetary policy. James Neviton, a senior FX trader at Convera, noted concerns expressed in the minutes regarding the persistence of inflationary pressures, leading to speculation among investors about the timing of potential interest rate hikes.

Consequently, market expectations regarding the timing of the first interest rate increase have shifted, with projections now leaning towards a window between September and November. This adjustment reflects evolving sentiments surrounding the trajectory of monetary policy and its implications for currency markets moving forward.  



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