The US Dollar (USD) rose on Thursday after a period of volatility, with the dollar index increasing by 0.2% to 104.53 after a significant drop the previous day. The euro remained flat, while sterling was down and the dollar was also down against the yen.
The rise in the US Dollar was attributed to better-than-expected retail sales and signs of cooling inflation, leading to the belief that the Federal Reserve may hold off on cutting interest rates. Traders are uncertain about the timing of rate cuts, with the odds for a reduction by March decreasing.
Deutsche Bank strategist Jim Reid warned about the market’s expectations for a swift shift by the Fed to rate cuts, citing previous instances where those expectations unwound.
In addition, the Australian and New Zealand dollars experienced decreases, with the Australian currency failing to gain support from a rebound in employment due to the increase in part-time labor and a higher jobless rate.