U.S. dollar strengthens as Fed holds rates steady

The U.S. dollar was stronger against major currencies on Friday after its best performance in three weeks. This came after the Federal Reserve showed no urgency to cut interest rates. The Australian and New Zealand dollars were weaker, following significant drops on Thursday. Concerns about the economic impact of U.S. President Donald Trump’s global trade tariffs were affecting market sentiment.

The dollar index, which tracks the U.S. dollar against six other major currencies, held steady at 103.81. It had risen 0.36% on Thursday. Earlier this week, the index had hit a five-month low of 103.19, after dropping from a peak of 110.17 in January. This decline was due to worries that Trump’s trade policies might cause a U.S. recession.

The Federal Reserve kept interest rates unchanged and suggested two rate cuts later this year. Jerome Powell, the Fed Chair, emphasized that they would not rush into any decisions. A new round of tariffs from Trump is expected on April 2.

The euro was stable at $1.0854 after falling 0.45% on Thursday. The British pound dropped slightly to $1.2961. The New Zealand dollar fell more than 1% but recovered slightly, while the Australian dollar remained steady after a significant decline.