Investing.com – In the European morning session on Thursday (4th), the U.S. dollar index rebounded from the low in the Asian market, but it was still close to a one-week low. Although the Fed raised interest rates by 25 basis points, it issued a pause in the tightening cycle signal.
As of 17:15 Beijing time (05:15 am ET), the dollar, which measures the dollar’s trade-weighted strength against six major currencies, rose 0.06% to 101.175 and rose 0.07% to 101.41.
The benchmark U.S. Treasury yield was at 3.375%, at 3.7855%.
On Wednesday (3rd), as people generally expected to raise interest rates by 25 basis points, the point is that the Fed does not expect to need to raise interest rates further to curb inflation.
That should “mark the end of the rate-hike cycle, as the Fed is likely to leverage the impact of the recent banking crisis on financial conditions to achieve the last bit of tightening,” analysts at ING said in a note.
Vulnerabilities in the U.S. banking system have also weighed on the dollar recently, with First Republic Bank ( First Republic Bank )(NYSE:) collapse means that three regional banks have hit a wall in the past few months.
Meanwhile the turmoil continues, PacWest Bancorp (NASDAQ: ) shares fell 37% premarket today after media reports said the bank would explore strategic options on Thursday.
The focus of the day is still there. The European Central Bank is expected to raise interest rates tonight, possibly by 25 basis points, but will not make a dovish assessment of future policy.
It fell 1.14% to 1.1043, just below the recent one-year high of 1.1096, although analysts at Deutsche Bank expect the euro/dollar could rise to its highest level since 2021.
“We see EUR/USD continuing to slide toward 1.15 mid-year, and while the Fed now appears open to a pause, the ECB may still have work to do and we expect it to accelerate its QT program.”
It fell 0.04 percent to 1.2559, not far from an 11-month high of 1.2594. The rate decision, due next week, is expected to continue tightening as inflation remains stubbornly high.
It fell 0.03% to 134.64. The yen was boosted by falling U.S. Treasury yields and increased safe-haven demand following heightened concerns about U.S. banks.
It was down 0.13% at 0.6661, despite the strong previously released and data.
It rose 0.09% to 6.9181 and rose 0.07% to 6.926. Reported at 2.778%.
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Compiler: Liu Chuan