US dollar consolidated on Friday after falling further on Thursday.
US Dollar (USD) trades generally stable on Friday, following a dramatic loss on Thursday as traders revalued the Greenback after the US Federal Reserve (Fed) joined the European Central Bank (ECB) and several other central banks in beginning its interest-rate-cutting cycle. The Bank of England (BoE) and the Bank of Japan (BoJ) have chosen to keep interest rates stable, prompting the US dollar will face competition from the British pound (GBP) and the Japanese yen.
Traders have repriced the US dollar in response to the Bank of Japan and the Bank of England’s decisions to keep interest rates on hold.
On the economic data front, the US economic calendar is rather empty, which allows traders to unwind after a turbulent week. Next week, a large amount of US data will be disclose. The major components are the final US Gross Domestic Product (GDP) figures for Q2 and the Personal Consumption Expenditures (PCE) Price Index, the Fed’s favored inflation indicator.
Daily Market movers: US Dollar Index is trading outside of its tight range, indicating that it may fall more next week.
The Bank of Japan (BoJ) maintained its interest rate at 0.25%. BoJ Governor Kazuo Ueda stated that inflation came in a little lower than expected and that the BoJ is keeping a careful check on economic statistics. And that it prepared to hike at any time when necessary.
Patrick Harker, President of the Federal Reserve Bank of Philadelphia, delivers a speech titled “The Federal Reserve: It’s More Than Just Interest Rates” at the Tulane University Freeman School of Business Lecture in New Orleans at approximately 18:00 GMT.
Following the high gains in the aftermath of the Fed rate announcement, equity markets are seeing some profit-taking. Both European markets and US futures are in the red. Even yet, losses are kept to a minimum, averaging 0.5%.
The CME Fedwatch Tool indicates a 59.3% possibility of a 25-basis-point rate drop at the next Fed meeting on November 7. The remaining 40.7% expects another 50-basis-point rate drop.
The 10-year benchmark rate in the United States is currently 3.71%, putting it in the middle of the week’s range of 3.60% to 3.76%.
