Dollar Holds Steady Amid Market Volatility: Focus Shifts to Economic Data

The dollar steadied on Wednesday after recent declines, hitting its weakest point in over a year. Traders are eyeing economic data which could influence the Federal Reserve's upcoming policy. Sharp volatility affected forex markets mid-August, fueled by U.S. recession worries and the Bank of Japan's hawkish stance.

The dollar held steady on Wednesday after a series of declines pushed it to its weakest in more than a year, as traders looked towards upcoming economic data that could influence the Federal Reserve's policy meeting in September.

Sharp volatility characterized the foreign exchange markets in early August, driven by concerns over a potential U.S. recession and aggressive signals from the Bank of Japan (BOJ), which sent the dollar lower and other major currencies higher.

The dollar index, measuring the greenback against a basket of currencies, rose by 0.32% to 100.86 but was still headed for its biggest monthly drop since November 2022. It reached a 13-month low of 100.51 in the prior session due to a reevaluation of expectations for upcoming Fed rate cuts.

(With inputs from agencies.)