The US dollar is Recovering after the Federal Reserve’s blow: The greenback is trying to recover from the losses of the previous session
it incurred following the negative developments of the Federal Reserve meeting.
In this regard, the dollar suffered strong daily losses at the end of yesterday’s session,
estimated at 0.43%, affected by the less hawkish statements made by the US Federal Reserve Chairman Powell last night,
as he said that delaying the interest rate cut step could harm the US economy,
Expect the interest rate cut cycle to begin in the second half of this year,
with hints that despite the strong labour market conditions and the outstanding performance of the US economy,
this will not prevent the Federal Reserve from taking an interest rate cut action.

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Release of Economic Forecasts

Release of Economic Forecasts

This coincided with the pressures the dollar faced at that time immediately
after the release of the economic forecasts by the Federal Reserve,
which indicated the possibility of three US interest rate cuts this year,
The Federal Reserve did not consider the rise in inflation rate during the past two months.
It should be noted that markets now see a 65% chance that the US Federal Reserve
will start cutting interest rates at the June meeting,
according to the Federal interest rate tracking performance issued by the CME Group.

Regarding the US dollar movements in the main currency market today,
it is noted that the dollar is trying to recover from the sharp losses
it witnessed in yesterday’s trading, supported by several factors,
which can be addressed in the following points:

1- Market optimism about the recovery of economic conditions in the United States

The economic forecasts of the US Federal Reserve revealed an increase in its estimates
for economic growth during the years 2024, 2025, and 2026 to 2.1%, 2%, and 2% respectively,
after the previous Federal Bank forecasts indicated that the economic growth of
about 1.4%, 1.8%, and 1.9% in 2024, 2025, and 2026 respectively,
which raised investors’ optimism about the strength of the economic conditions in the United States,
Therefore, the demand for the dollar clearly recovered during the transactions.

2- The strong decline of the euro in today’s trading

The decline of the euro or the unified European currency supported the dollar’s movements
in trading after recent data revealed the continued contraction of the manufacturing sector in France, Germany,
and the eurozone at a pace that exceeded market expectations,
which fueled traders’ concerns about the reflection of the economic growth of the region’s countries,
which enhanced the dollar-buying operations in transactions.

Based on these positive factors, the dollar index
(which measures the performance of the green currency against a basket of major currencies, including the euro)
0.09%, a record of about 103.47 points.

The US dollar is Recovering after the Federal Reserve’s blow.

The US dollar is Recovering after the Federal Reserve&#8217;s blow

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The US dollar is Recovering after the Federal Reserve’s blow