The U.S. dollar fell 0.6% following Wednesday’s release of the March CPI report and FOMC minutes. The combination of the data led to growing expectations that the Fed could cut rates later in the year.
In his testimony, Fed Chair Jerome Powell warned of inflation remaining stubbornly above the 2% target and opened the door to a possible 50 bps hike in March. This may have led the dollar index to hit a three-month high.
Central Banks are financial institutions responsible for key monetary policies that have a direct influence on inflation, CPI, and more. Read more about central banks, what they are, and their importance.
Expectations for the Fed to focus on labour data make the FOMC minutes and NFP numbers more critical as they provide insights into the committee’s policy stance and how difficult Fed's work might become going forward.
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