US dollar firms against peers after Fed holds rates steady

The U.S. dollar was firmer against major currencies on Wednesday after the Federal Reserve left interest rates unchanged as widely expected but gave scant clues about further reductions in borrowing costs this year.

Fed officials made a unanimous decision to keep the overnight interest rate in the current 4.25%-4.50% range, putting the central bank in a holding pattern as they await further inflation and jobs data and clarity on the impact of President Donald Trump’s policies.

During his press conference, Fed Chair Jerome Powell it is too soon to say what Trump’s policies will do and the central bank’s 2% inflation target will remain in place.

“It seems pretty understandable and comprehensible that they are feeling confident that they may not need any rate cuts,” said Juan Perez, director of trading at Monex USA in Washington.

“And they’re not making any promises. But at least in the questions that he’s being asked, Powell is being very cautious that until there is some more evidence they’re going to be on a wait-and-see mode. That is why you didn’t see the FX market collapse. But you’re seeing the dollar steady,” Perez added.

The dollar strengthened 0.35% to 0.907 against the Swiss franc. Against the Japanese yen, the dollar weakened 0.17% to 155.25. The euro was down 0.17% at $1.041.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.09% to 108.02.

The index touched a one-month low on Monday at 106.96 amid a global selloff in technology stocks and rush to safe-haven currencies such as the Japanese yen and Swiss franc, but the index is still up more than 4% since the U.S. election won by Trump in November.

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Howard Lutnick, a billionaire Wall Street CEO and Trump’s nominee to head the Commerce Department, said at his U.S. Senate confirmation hearing on Wednesday that he has advised the president to pursue across-the-board tariffs country-by-country to restore “reciprocity” to America’s trading relationships.

The Bank of Canada cut its key policy rate by 25 bps to 3% on Wednesday, and told Canadians that a tariff war triggered by the United States could cause major economic damage.

The Mexican peso < MXN=> strengthened 0.17% versus the dollar at 20.529. The Canadian dollar weakened 0.16% versus the greenback to C$1.44 per dollar.

Bank lending to firms in the euro area picked up last month, indicating that rapid interest rate cuts have started to flow through to the real economy, European Central Bank data showed. The ECB is widely expected to cut rates on Thursday.

Bitcoin gained 3.73% to $104,067.20. Ethereum rose 2.71% to $3,135.41.

“The one thing that is established is that in comparison to everything else, the U.S. economy continues to be solid – and to the point where now the Federal Reserve, unlike most central banks, does not need to be stimulus driven,” Perez said.

Currency bid prices

at 29 January​

09:03 p.m. GMT

Description RIC Las U.S. Close Pct YT Hig Low

t Previous Chan D h Bid

Session ge Pc Bid

t

Dollar index 108 107.92 0.12 -0 108 107

.03 % .4 .29 .74

2%

Euro/Dollar 1.0 1.0431 -0.1 0. $1. $1.

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411 8% 57 044 038

% 4 3

Dollar/Yen 155 155.55 -0.1 -1 155 154

.34 4% .2 .68 .99

8% 5 5

Euro/Yen 161 162.19 -0.3 -0 162 161

.71 % .9 .49 .32

​ 3%

Dollar/Swiss 0.9 0.9042 0.36 -0 0.9 0.9

074 % .0 094 033

1%

Sterling/Dollar 1.2 1.2443 -0.0 -0 $1. $1.

439 2% .5 246 239

4% 3 4​

Dollar/Canadian 1.4 1.4403 0.17 0. 1.4 1.4

425 % 33 471 394

%

Aussie/Dollar 0.6 0.6252 -0.3 0. $0. $0.

226 6% 67 625 621

% 6 1

Euro/Swiss 0.9 0.9429 0.18 0. 0.9 0.9

446 % 54 46 423

%

Euro/Sterling 0.8 0.8383 -0.2 1. 0.8 0.8

365 1% 11 387 365

%

NZ Dollar/Dollar 0.5 0.5667 -0.2 1. $0. 0.5

651 5% 02 566 635

% 8

Dollar/Norway 11. 11.2741 0.25 -0 11. 11.

301 % .5 347 267

9​ 6% 3 3

Euro/Norway 11. 11.7601 0.06 -0 11. 11.

767 % .0 791 752

3 1% 4

Dollar/Sweden 11. 10.997 0.12 -0 11. 10.

009 % .0 037 976

9 7% 2

Euro/Sweden 11. 11.4706 -0.0 -0 11. 11.

463 6% .0 478 445

4 3% 7 6