Currency fluctuations have been influenced by recent central bank decisions, with the Swiss franc and Swedish crown both weakening following interest rate adjustments. The euro dipped against the dollar amid U.S. policymakers’ unchanged rates. The British pound briefly rose before declining, while the yen and Australian dollar also fell. Despite some positive U.S. economic indicators, concerns persist about global economic stability, impacting various currencies. Bitcoin saw a slight increase, reaching a near two-week high.
Currency Movements Amid Central Bank Decisions
The Swiss franc experienced a decline following the Swiss National Bank’s decision to cut its benchmark interest rate to 0.25%. Similarly, the Swedish crown also weakened after the central bank opted to maintain its interest rate. The euro fell by 0.7% against the dollar, trading at $1.0828, after U.S. policymakers decided to keep interest rates unchanged and projected two quarter-point reductions by the year’s end, mirroring the median forecast from three months prior. Fed Chairman Jerome Powell emphasized, “We will not be rushed to act,” highlighting the challenges faced by policymakers as they respond to the implications of President Trump’s tariff plans on the economy.
Recent data from Thursday indicated a slight uptick in new unemployment claims in the U.S. last week, suggesting stability in the labor market for March. Positive U.S. economic indicators have alleviated fears of a growth slowdown, leading to a decrease in the dollar’s value by up to 7% against the euro since mid-January, according to Jayati Bharadwaj, a currency strategist at TD Securities. “Much of the negative news has been factored into the markets, yet the expected downturn data is not materializing, and even the Fed is not signaling urgency in rate cuts,” Bharadwaj noted. She anticipates a short-term strengthening of the dollar as traders predict 63 basis points of easing from the Fed this year, based on LSEG data.
Central Banks’ Impact on European Currencies
The dollar’s strength has placed pressure on the British pound, though the currency managed to recover slightly after the Bank of England maintained its interest rates at 4.5%, cautioning against assumptions of imminent cuts in upcoming meetings amidst significant uncertainties affecting both the British and global economies. British inflation remains firmly above the 2% target, and the BoE has been more conservative in reducing borrowing costs compared to the European Central Bank and the Fed since last summer, contributing to sluggish growth. The pound reached a four-month high of $1.3015 earlier in the day but later fell 0.3% to $1.2964.
In a significant day for central banks, the Swiss franc weakened by 0.7% against the dollar after the Swiss National Bank reduced its main interest rate slightly above zero and indicated concerns about the global implications of U.S. trade policies. The Swedish central bank held its key rate steady at 2.25%, resulting in a 0.7% decline in the Swedish crown’s value against the dollar. The yen also saw a slight dip, trading at 148.85 per dollar, following the Bank of Japan’s decision to maintain its rates while warning of increasing global economic uncertainties. The Australian dollar decreased by 1.1% to $0.62875 after unexpected job losses in February ended a series of strong employment figures, despite a stable unemployment rate. Meanwhile, the New Zealand dollar fell 1.4% to $0.5736, even though recent data indicated the economy had emerged from recession with a faster-than-expected growth rate of 0.7% in the last quarter, albeit with weak underlying details. Bitcoin, the leading cryptocurrency by market cap, rose approximately 1% to $86,193, hitting a near two-week high.