Anna 
On Thursday, the US dollar made gains against the euro and pound following remarks from a US Federal Reserve policy maker indicating a reluctance to cut interest rates. Traders remained cautious with the yen amidst concerns of potential Japanese intervention, keeping the currency stable at 151.42 per dollar after flirting with the 152 mark, its lowest since 1990.
The euro dipped 0.33% to $1.0792, hitting its lowest level in five weeks, while the pound also declined by 0.25% to $1.2609. Consequently, the dollar index rose by 0.16% to 104.6, reaching its highest point since mid-February.
During late US trading hours on Wednesday, Fed Governor Christopher Waller suggested that recent disappointing inflation data supported the case for the central bank to hold off on cutting short-term interest rates. Market expectations for the first rate cut at the Fed’s June meeting have slightly eased, with current pricing indicating a 60% chance compared to 67% the previous week, according to the CME FedWatch tool.
Lee Hardman, senior currency strategist at MUFG, noted, “Waller’s remarks have put some momentum into the market, which has been stuck in very tight trading ranges.”
Investors are now awaiting US core PCE inflation figures scheduled for release on Friday, as well as an appearance by Fed Chair Jerome Powell.
The yen remains a focus of attention, with market participants closely monitoring movements around the 152 level in the dollar/yen pair. Takeshi Ishida, a currency strategist at Resona Holdings, highlighted the potential for intervention if the pair breaches this level, especially in light of Friday’s US inflation data.
The Bank of Japan’s summary of opinions from its March meeting offered little support for the yen, with policymakers emphasizing the need to proceed cautiously in scaling back ultra-loose monetary policy.
Meanwhile, the Chinese central bank’s move to set the yuan fixing at the widest gap against Reuters’ estimate in nearly five months reflects efforts to prevent sharp declines in the currency. The onshore yuan remained stable at 7.2277 per dollar, while the offshore yuan stood at 7.2591 per dollar.
The Swiss franc continued to face pressure, with the dollar rising to 0.9059 francs, nearing a four-month high. Additionally, the Australian dollar weakened by 0.6% to $0.6495, partly impacted by Waller’s remarks and disappointing retail sales data from Australia, which showed only a marginal increase in February.
