- The U.S. dollar rose on Thursday, bouncing off a one-year low after the Federal Reserve announced a major interest rate cut, while sterling strengthened ahead of the Bank of England’s latest policy-setting meeting.
- At 4:25 AM ET (08:25 GMT), the Dollar Index, which measures the greenback against a basket of six other currencies, was trading 0.1% higher at 100.410, after falling to its lowest level in more than 12 months in the previous session.
- Gold rose above $2,580 an ounce on Thursday after retreating from a record level in the previous session, as markets continued to assess the Federal Reserve’s decision.
- On Wednesday, the Fed delivered its first interest rate cut since early 2020, a larger-than-expected 50 basis point cut to address weak inflation and a potential slowdown in the labor market.
- Fed officials also projected that the benchmark interest rate could fall another half percentage point later this year. The move is seen as boosting demand for gold by reducing the opportunity cost of holding the non-yielding asset.
- The U.S. central bank cut interest rates by half a percentage point on Wednesday. Rate cuts typically boost economic activity and energy demand, but markets also see them as a sign of a weakening U.S. labor market that could slow the economy. The Bank of England on Thursday kept interest rates at 5.0%.
- The S&P 500 rallied to a record closing high on Thursday, a day after the Federal Reserve cut interest rates by 50 basis points and signaled more rate cuts were on the horizon.
