The US Dollar (USD) showcased a remarkable resurgence following a late Wednesday selloff, with the USD Index climbing over 0.5% on Thursday, recouping losses post-Federal Reserve statements. Early Friday witnessed a continued upward surge, propelling the USD Index to its highest level in three weeks, exceeding 104.00. Today, Federal Reserve Chairman Jerome Powell is set to deliver opening remarks at the Fed Listens event, alongside several other Fed policymakers scheduled to give speeches ahead of the weekend.
Thursday’s American session saw the USD outperforming its counterparts, buoyed by encouraging macroeconomic data releases. PMI surveys revealed a sustained expansion of economic activity in the private sector during early March, coupled with strengthening input price pressures. Additionally, Initial Jobless Claims dipped to 210K in the week ending March 16.
US Dollar Performance This Week:
The table illustrates the percentage change of the US Dollar (USD) against major currencies this week, with the USD emerging strongest against the Swiss Franc.
During the March policy meeting, the Bank of England (BoE) upheld the bank rate at 5.25%, in line with expectations. The BoE refrained from signaling the timing of a policy pivot in its statement. Notably, none of the policymakers advocated for a rate hike, while one member voted for a rate cut. BoE Governor Andrew Bailey indicated that markets should anticipate more than one interest rate cut this year, expressing increasing confidence in inflation aligning with the target. GBP/USD faced substantial bearish pressure, trading near its lowest level in a month around 1.2600.
On Thursday, the Swiss National Bank (SNB) surprised markets by lowering the policy rate by 25 basis points to 1.5%, contrary to expectations of maintaining the rate unchanged. The initial reaction triggered a Swiss Franc selloff, propelling USD/CHF over 1% to its highest level since November, above 0.9000.
EUR/USD extended its decline after breaching below 1.0900 on Thursday, registering a nearly 0.6% daily decrease. The pair continued its descent early Friday, trading below 1.0850.
USD/JPY concluded its eighth consecutive day in positive territory on Thursday before undergoing a technical correction towards the 151.50 area on Friday. Bank of Japan Governor Kazuo Ueda reiterated the central bank‘s stance on Japanese government bond (JGB) holdings remaining at current levels for the time being.
While the Japanese Yen maintained modest intraday gains against the USD, its upside potential appears limited.
Gold experienced a sharp reversal after hitting a new record high above $2,220 early Thursday, ending the day in negative territory. XAU/USD remained on the back foot during the European morning, losing over 0.5% below $2,170.
