Dollar Rebounds Amid U.S. Strong Currency Policy

The dollar rose against a basket of currencies after Treasury Secretary Scott Bessent reaffirmed a commitment to a strong dollar, denying U.S. intervention in currency markets. Despite a recent slide, the dollar index rebounded amidst policy volatility and economic reassessments, affecting global currencies like the euro and yen.

The dollar gained ground against various currencies on Wednesday, reversing from a previous four-year low. This surge followed Treasury Secretary Scott Bessent's declaration of the United States' preference for a strong dollar.

Despite fears of market intervention, Bessent denied any U.S. attempts to influence the Japanese yen's value. The dollar index jumped 0.5% to 96.391, recovering from Tuesday's dip to 95.86, its lowest since February 2022. President Donald Trump's disregard for the recent dollar slump emboldened traders, who escalated selling ahead of the Federal Reserve's policy announcement.

Market analysts link the dollar's recent turmoil to Federal Reserve rate cut expectations, tariff uncertainties, and fiscal deficits. Repercussions of these developments have reverberated globally, impacting currencies such as the euro and yen. European leaders express concern over the euro's strength, while Japanese yen benefits from the dollar's decline, gaining over 4% in three days.

(With inputs from agencies.)