Dollar gains as Fed Res denies possibility of higher rate cuts

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Dollar gains as Fed Res denies possibility of higher rate cuts

On Friday, 19th July, after the Federal Reserve came up with the assurance that higher cuts on key interest rates were not on the cards, the American dollar saw its value move upwards. On Thursday, 18th July, the dollar had slumped after statements from John Williams, the New York Fed President who argued in favour of pre-emptive strikes to cut down on the effects of reduced inflation.

The DXY dollar index gained around 0.39 per cent to on Friday at about 97.17. Earlier on Thursday, following Williams' statements, the DXY had slipped to a fortnightly low of about 96.65. Despite the dollar gaining, market and currency analysts are expecting a rate cut in July.

As such, the analysts are also expecting the dollar to be sensitive in its movements taking cues from the Fed Res's decision-making. Meanwhile, the Euro slumped both against the dollar and against the Swiss Franc on Friday, The Euro was down by around 0.51 per cent against the dollar and was trading at 1.22.

Against the Swiss Franc, it was down by around 0.42 per cent and was trading at around 1.10. According to Reuters, this is the first time in two years that the Euro has slipped against the Swiss Franc to such an extent. The reasons for the Euro's slump have been attributed to expectations of rate cuts by the European Central Bank in the upcoming week.