The US Dollar Index has been broadly supported during March by a shift in the commentary coming from interest-rate-setters in the US Federal Reserve.
From previously expecting to cut the key interest rate in the US – the Fed Funds Rate – by a total of 0.75% in 2024, in three 0.25% tranches, some members of the decision-making council have changed their opinion and now see less need to cut interest rates.
Their change in view is as a result of inflation remaining higher-than-expected, especially services sector inflation and robust economic growth in the US, which has continued to show dynamism even in the face of higher borrowing costs.
The DXY recovered after a dip on Thursday after Minneapolis Federal Reserve (Fed) Bank President Neel Kashkari raised the prospect the Fed might not cut interest rates at all in 2024 if inflation remained at current levels.
“If inflation continues to move sideways, it makes me wonder if we should cut rates at all this year,” Kashkari said, despite admitting to previously penciling in two rate cuts this year
