The US dollar (USD) regained some ground on Thursday, 2 May 2024 after Jerome Powell, Chair of the US Federal Reserve, indicated that there would be no immediate rate hikes.
Powell Rules Out Rate Hikes, Greenback Steadies After 0.6% Drop
According to Investing.com, the Dollar Index climbed by 0.1% after its overnight drop of 0.6% on Wednesday, 1 May 2024. Powell admitted that the battle against high inflation continues and that interest rates will remain unchanged for now.
He also said that he did not foresee increases for 2024, which came as a surprise given the latest inflation information. In a note, Goldman Sachs Group, Inc. (GS) analysts commented:
“hile the Committee added a hawkish acknowledgment of the ‘lack of further progress’ on inflation so far this year to its statement, Chair Powell offered a dovish message in his press conference. We have left our forecast unchanged and continue to expect two rate cuts this year in July and November.
As Powell indicated that any monetary policy decisions depend on the data, analysts will closely monitor inflation and relevant index movements such as the US employment report, which comes out on Friday, 3 May 2024.
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Experts predict April 2024 nonfarm payrolls to come in at 243,000, a slip from more than 300,000 in March 2024. This, however, still reflects a sound job market.
At the time of publishing, the EUR/USD were 1.0699, down 0.1% because of the sluggish manufacturing sector. The GBP/USD were trading at 1.2509, which is also a 0.1% slide.
The latest Eurozone manufacturing Purchasing Managers’ Index (PMI) fell to 45.7 in April 2024 from 46.1 in March 2024. This will be the 22nd month that this index is below the desired 50 mark.
