The U.S. dollar remained stable in early Asian trading on Friday as investors awaited new catalysts following the Federal Reserve’s recent rate cut decision. The dollar index edged up by 0.1%, recovering slightly from a three-and-a-half-year low after the Fed reduced rates by 25 basis points but indicated no immediate plans for further cuts. The dollar also gained marginally against the yen, rising 0.1% to 148.085 yen, ahead of the Bank of Japan’s (BOJ) policy decision later in the day. The BOJ is widely expected to maintain interest rates at 0.5%, with market focus on potential hints of future adjustments. The ongoing leadership election within Japan’s Liberal Democratic Party (LDP) is likely to influence the BOJ’s cautious stance, as Governor Kazuo Ueda is expected to avoid signaling any significant policy shifts. Meanwhile, the broader currency market is assessing the long-term impact of the Trump administration’s tariffs and its criticism of the Fed’s rate decisions. The U.S. Supreme Court has set a date to hear arguments on the legality of Trump’s global tariffs, a key element of his economic agenda. Additionally, the Trump administration has sought unprecedented authority to dismiss Federal Reserve Governor Lisa Cook, raising concerns about the central bank’s independence. Foreign demand for U.S. Treasuries remains strong, with overseas holdings reaching a record high in July. The euro and sterling both weakened slightly, while the kiwi and Australian dollar continued to decline following disappointing economic data.
Dollar steadies as investors consider post-Fed outlook, focus turns to BOJ meeting
