The US dollar recorded a modest rise after experiencing significant declines since last week after policymakers agreed to maintain interest rates at 3.75% during the January FOMC meeting.
At 9.30 am, the US Dollar Index (DXY) was at 96.280 points, down 0.06% since it opened in early trading on Thursday in the Asian session.
The US Federal Reserve (Fed) maintained the overnight lending rate in a range of 3.5% to 3.75% following the Federal Open Market Committee (FOMC) meeting.
The post-meeting statement showed that economic activity continued to grow at a strong pace, while the unemployment rate showed signs of stabilization.
In a press conference, Fed Chairman Jerome Powell stressed that current data does not indicate that monetary policy is too tight, thus reflecting the central bank's cautious stance in assessing the direction of its next policy.
The Fed's decision comes amid heightened political pressure, with President Donald Trump indicating that he is close to finalizing a candidate for the new Fed Chair.
At the same time, the Justice Department's investigation into Powell has also sparked market concerns about potential interference with the central bank's independence.
The US dollar index remains under pressure, down nearly 2% so far this year after falling 9.4% over the past year.
Although Trump described the dollar as strong, the market interpreted the statement as a signal encouraging dollar selling ahead of the Fed's policy decision.
The dollar's weak performance was driven by expectations of continued interest rate cuts, uncertainty over trade tariffs, policy uncertainties including the Fed's independence issue, and a rising fiscal deficit.
This combination of factors has eroded investor confidence in the stability of the US economy, thus weighing on the currency in global markets.
