Dollar extends post-Fed rebound; sterling hit by fiscal worries

Written by Iqbal Ahmed

New York (Reuters) -The dollar was strengthened on Friday, with a recovery against most major currencies, as traders reviewed expectations close to the term after reducing the federal reserve of interest rates this week, but they indicated a gradual reduction in the future.

The US dollar currency index, which tracks Greenback against six major peers, increased by 0.3 % to 97.662. The scale, which decreased by 1 % on Monday and Tuesday, was on expectations that the Federal Reserve may show a quick series of discounts in prices, around a week.

On Wednesday, the Federal Reserve delivered the expected lower prices, but indicated a little urgency to the rapid decrease in borrowing costs in the coming months. Federal reserve average forecast, or the so -called “DOT conspiracy”, showed expectations of other price discounts this year.

“It is really a week of two halves,” said Marc Chandler, the chief strategy of the market in the Bangkirn Forex. “The sounds, the actual points, were not like the statement and the concerns related to the labor market it suggested.”

The American currency may have a space for apostasy after facing pressure on the days before the decision of the Federal Reserve.

“What we say to our customers is that this is just an anti -direction step. If you have to sell dollars, you will have a better level soon,” said Chandler.

Sterling sterling chip

The British pound fell on Friday after Britain’s parade rose to the past official expectations, which made the country’s complexity of the country’s financial expectations, while the yen after the Bank of Japan issued fixed prices, with opposition to the board of directors.

The pound was one of the worst performance among the G10 currencies, which reflects the investor fears that British Finance Minister Rachel Reeves may not be able to maintain its budget under control.

The currency fell 0.6 % to $ 1.3468, at the pace of the largest decrease for two days since early April.

“Although better reading of the UK’s retail sales data in the UK, the poor UK government review data has highlighted the difficulties faced by Counselor Reeves in providing the UK budget in November,” said Jin Foley, FX president at Rabobank.

The data published early on Friday showed that British retail sales rose 0.5 % of the expected in August, and the sunny weather, but sales growth in July has been revised slightly.

The borrowing numbers – the highest for the first five months of the fiscal year since 2020 – can pave the way for more tax increases.

Even before Friday data, Reeves was expected to announce new tax increases in its budget on November 26 to stay on the right track to meet its financial rules and avoid new disturbances in the financial markets.

Boj showroom supports yen

In BOJ, the unexpected opposition by two members of the Board of Directors against the decision to retain the unstable investors and convert their focus again over the extent that BOJ will raise prices.

“This was not unexpected, and it indicates that the high policy prices may be closer to what was expected,” said David Zhao, the world’s Pacific global market expert in Envosko in Singapore.

He added that the next meeting of the Japanese Central Bank on October 30 will be “the best opportunity” to raise the rate of the rest of 2025.

After a volatile session, the yen did not change almost a day at 147.975 against the dollar.

Investors are still not sure whether the BOJ Policy Policy will be affected by the leadership race on October 4 in the Japanese Liberal Democratic Party to replace the outgoing Prime Minister Shigro Ishiba.

The New Zealand dollar extended its ride from the previous session, as it decreased by 0.4 %, a day after the weak reading in a remarkable way to look at the economy paid the returns of a decrease sharply as the markets of betting increased to larger price cuts.

Bitcoin encrypted currency was 2 % lower at $ 115,379.

(Participated in SQIB IQBAL AHMED reports; additional reports by Gregor Stewart Hunter and Sarah Rossi edited by Shri Navarenam, Jacqueline Wong, Amanda Cooper, Kim Kogel, Gareth Jones, Andrew Hevins and Richard Chang)