The US dollar edged higher on Thursday but remained near multi-year lows, as the Fed’s slightly hawkish tone failed to offset ongoing concerns over US policy and central bank independence.
The currency posted its biggest weekly drop since April last year, with investors increasingly wary of exposure to US assets amid geopolitical and policy uncertainty.
While Treasury Secretary Scott Bessent reiterated the preference for a strong dollar and Fed Chairman Jerome Powell signaled a longer delay before further rate cuts, markets remained divided on the direction of monetary policy.
The euro held near record highs after a sharp surge, but ECB policymakers warned that a strengthening currency could increase deflationary pressures and potentially force a change in policy stance.
In Asia, the yen found some support as the US dollar fell, while the Australian dollar hit a three-year high on expectations of domestic rate hikes, reflecting policy divergence and increasingly dominant global risks.
