The U.S. dollar is slightly strengthening today against a basket of major global currencies, though trading remains subdued. Investors are waiting for new signals that would determine the next direction on foreign exchange markets, while the dollar weakens against the Japanese yen.
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Markets lack clear direction
Around 17:45 CET, the dollar index, which tracks the performance of the U.S. currency against a basket of six major global currencies, rose by 0.1 percent to 97.84 points. The euro weakened against the dollar by 0.2 percent to 1.1787 USD, while the dollar fell 0.1 percent against the yen to 156.18 JPY. The euro lost 0.3 percent against the yen and traded around 184.11 JPY.
Kazuo Ueda, governor of the Japanese central bank, said that the Bank of Japan will continue raising interest rates if the economy meets expected growth and inflation forecasts. According to a Tuesday report, Prime Minister Sanae Takaichi expressed concerns about further monetary policy tightening during a recent meeting with Ueda.
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Investors assess data and geopolitics
According to Karl Schamotta, a strategist at Corpay, movements on the foreign exchange market remain muted as traders continue to assess the outlook for tariff policy, investor sentiment, and the state of the global economy. Major currency pairs are thus holding near previous closing levels with no clear directional trend.
Risk assets, nonetheless, remain relatively well supported, partly due to strong results from Nvidia, which confirm continued investment in artificial intelligence. Uncertainty surrounding U.S. trade policy persists, however. The Fed is expected to hold interest rates unchanged at least through June, while inflation is accelerating and the labor market is showing early signs of risk. ECB President Christine Lagarde reiterated that inflation should stabilize near the two percent target and confirmed she will remain in office until the end of her term. A Reuters report also noted that the ECB sold some of its dollar assets at the beginning of last year and reduced the share of dollars in its foreign exchange reserves.
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Source: CTK
