Dollar Loses Ground as Fed Signals Pause in Rate Hikes The dollar index edged lower to 101 on Monday, continuing its downward trend from last week as the Federal Reserve suggested it may stop raising rates for now.
The Fed raised its benchmark rate by 25 basis points on Wednesday, as widely expected, but dropped the word “anticipates” from its statement, implying that it may not need to hike rates further.
Fed Chair Jerome Powell explained that the committee is not considering cutting rates either, based on their inflation outlook.
The US economy also surprised with a strong April jobs report on Friday, showing that 253K jobs were created last month, beating estimates of 180K and boosting wage growth to a 9-month high.
Investors will now focus on US consumer and producer inflation data due on Wednesday and Thursday, respectively, as well as bank lending figures to gauge the economic and monetary policy situation.