Dollar Soars as Fed Hints at Rate Stability

The U.S. dollar strengthened against other major currencies as speculation of a Federal Reserve rate cut waned. This followed cautious remarks from Fed officials and mixed economic data, leading to tempered expectations. The dollar index increased, while weaker European currencies reflected market uncertainty ahead of Jerome Powell's upcoming speech.

The U.S. dollar surged to a two-week high against major currencies, reflecting investor sentiments ahead of Federal Reserve Chair Jerome Powell's Jackson Hole address.

Expectations of a rate cut have diminished following cautious remarks from Fed officials, despite earlier labor market signals suggesting otherwise. This cautious stance is highlighted by a shift in the dollar index, rising by 0.1% to 98.72, aiming to recover from a two-week decline.

As investor eyes turn to Powell's speech, the dollar reflects the conservative outlook, with market watchers pricing a lowered probability of a September rate cut. Economic data presents mixed signals with persistent inflation worries, challenging global currencies against the bolstered dollar.

(With inputs from agencies.)