Dollar Soars as Fed Holds Rates Firm Against Dissensions
The dollar strengthened after the Federal Reserve left U.S. interest rates unchanged, defying Trump's pressure. Vice Chair Bowman and Governor Waller dissented, advocating a rate cut. Economic growth defied expectations, impacting markets. Trade negotiations, especially with China, India, and Brazil, are impacting market sentiment and exchange rates.
The dollar surged on Wednesday after the Federal Reserve opted to maintain interest rates, aligning with market predictions and countering pressure from President Donald Trump. The decision saw a narrow 9-2 vote, with Bowman's and Waller's dissent for a rate reduction.
Fed Chair Jerome Powell anticipated a gradual process to understand trade tariffs' impact on inflation. The metal sustained its strength with notable economic growth in the second quarter, despite expected projections.
Investor focus has shifted towards the China-U.S. tariff negotiations, with tensions escalating as Trump targets India and Brazil with new tariffs. Meanwhile, the euro suffered as the dollar index reached new heights, reflecting a broader market reaction to the Fed's stance.
(With inputs from agencies.)
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