Against expectations, the US dollar managed to show a recovery with a more significant strengthening at the opening of the New York session yesterday.
This followed the decision to cut interest rates for the first time this year by the Federal Reserve (Fed), which signaled that further easing measures would continue.
The majority of FOMC members agreed to lower interest rates by 25 basis points to 4.25% compared to 4.50% maintained since December last year.
Although FOMC members' projections indicate that there will be two more interest rate cuts in the remaining meetings at the end of 2025, Fed Chairman Jerome Powell stated that the central bank does not need to rush to lower interest rates.
Market analysts see the strengthening of the US dollar in these several sessions as temporary with profit-taking activities occurring for short positions in the currency in previous weeks.
The US unemployment benefit claims data published in the New York session yesterday also recorded good figures, slightly supporting the current recovery pattern for the US dollar.
In the long term, the US dollar is still likely to move weakly following the Fed's monetary policy shift at the September meeting.
Meanwhile, the Bank of England (BOE) stole the spotlight yesterday with the expected policy meeting result, which was to keep interest rates unchanged at 4.00%.
Investors are also assessing the policy meeting result by the Bank of Japan (BOJ) in the Asian session this Friday morning.
