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The dollar held steady near its two-week low on Friday, poised for its largest weekly decline in a month. This stability reflects ongoing U.S. tariff negotiations and anticipation of upcoming central bank meetings that will provide insights into future policy directions.
Investors are closely monitoring the Federal Reserve and the Bank of Japan’s upcoming policy meetings. Both institutions are expected to maintain current interest rates, but market participants remain focused on any additional comments following these meetings. Carol Kong, a currency strategist from the Commonwealth Bank of Australia, noted that the BOJ’s meeting would be particularly watched for signs of when the next rate hike might occur.
Following an agreement with the United States that reduced tariffs on Japanese auto imports, expectations for a potential BOJ rate hike have improved. Concurrently, the dollar index fell by 1% for the week. The Australian dollar has rallied as U.S. Treasury Secretary Scott Bessent prepares to discuss trade matters with Chinese officials, reflecting market optimism.
📚 Reading Comprehension Quiz
What event is expected to influence the stability of the dollar according to the passage?
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