U.S. Dollar Steady Amid Economic Uncertainty and Trade Tensions

The U.S. dollar maintained stability against the euro on Thursday, following its most significant rise in two weeks the day before. This came after the Federal Reserve highlighted increasing risks to the economy due to inflation and unemployment concerns.

Support for the dollar was bolstered by hopes of reduced trade tensions between Washington and Beijing. Investors are keenly observing developments ahead of a scheduled meeting in Switzerland. The Federal Open Market Committee held interest rates unchanged on Wednesday, with Fed Chair Jerome Powell expressing uncertainty about the future pace of economic growth amid trade uncertainties and potential inflation spikes.

Powell remarked on the ambiguity surrounding appropriate monetary policy responses at this time. Markets are currently pricing in three quarter-point rate cuts by year-end, with expectations for cuts in July or September. The dollar experienced minor changes against the euro and yen, while remaining stable against sterling, as the Bank of England is expected to announce a rate cut.

(With inputs from agencies.)