Dollar Gains Ground

2025-09-18 12:56 By Joana Taborda 1 min. read

The dollar index strengthened toward 97.3 on Thursday, rebounding slightly from the 2022 lows touched earlier in the week as traders digested the Fed’s first interest rate cut of the year and better-than-expected jobless claims.

Volatility followed the decision and Chair Powell’s press conference, where he framed the move as a “risk management” cut and cautioned that there are no risk-free paths.

The Fed also signaled an additional 50bps of cuts this year, followed by another 25bps reduction in 2026.

Meanwhile, initial jobless claims fell much more than expected to 231K from a 4-year high, easing some concerns about the labour market weakness.

The greenback traded mostly higher against the euro and the pound, with the latter surrendering early gains after the BoE left borrowing costs unchanged, as expected, while slowing the pace of its balance sheet reduction.

Meanwhile, the Bank of Canada trimmed rates by 25bps, and the Bank of Japan is expected to keep policy unchanged tomorrow.



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