Dollar heads for small weekly loss; Fed rate cuts in focus
Investing.com — The U.S. dollar steadied in early European trade Friday, as traders balanced elevated risk sentiment with hawkish signals from the Federal Reserve which cast more doubts over the likelihood of early U.S. rate cuts.
At 04:15 ET (09:15 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded marginally lower at 103.850.
It fell to 103.43 overnight, the lowest since Feb. 2, but remains below the 104.97 level reached on Feb. 14, which was the highest since Nov. 14.
The dollar is on course for a losing week, with traders seeking out more cyclical currencies in the wake of blockbuster earnings from AI darling Nvidia (NASDAQ:NVDA) which boosted investors’ confidence around the globe.
However, losses are minor amid more signals that the Fed will keep rates higher for longer, following on from the minutes of the late-January meeting, released on Wednesday, which showed that the central bank was in no hurry to reduce interest rates in the near-term.
Fed Governor Christopher Waller said on Thursday that he needed more evidence that inflation was cooling, before the central bank would consider interest rate cuts.
His comments were the latest among a slew of other Fed officials who said that the bank was in no hurry to begin trimming monetary policy.
Waller’s comments came just hours after data showed jobless claims unexpectedly fell over the past week, signaling continued strength in the labor market, which gives the Fed even less impetus to cut rates early.
“Risk-sensitive assets would normally suffer from an easing pushback, but the narrative in equity markets is strictly one of tech-driven outperformance after very strong results from Nvidia,” said analysts at ING, in
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