Dollar under pressure early on Thursday

The dollar was under pressure early on Thursday after Federal Reserve will pause its rate tightening cycle this year while China-US trade talks reduce demand for safe-haven assets.

“The Fed has acknowledged market concerns with its language. The markets are clearly reading into this as a more accommodative stance,” said Michael McCarthy, chief markets strategist at CMC Markets.

Canadian dollar have been the biggest beneficiaries of improving risk sentiment this week.

Commodity currencies such as the Canadian dollar have been the biggest beneficiaries of improving risk sentiment this week. The Canadian dollar fetched C$1.3206, near its highest level in more than a month thanks to a sharp rebound in oil prices.

The dollar index (DXY) was marginally lower at 95.14, after losing 0.7 percent on Wednesday.

The dollar had gained 4.3 percent in 2018 as the Fed hiked rates four times on the back of a strong domestic economy, falling unemployment and rising wage pressures.

The euro (EUR=) and sterling each gained marginally on the dollar, fetching $1.1547 and $1.2794 respectively. However, traders expect the strength in both currencies in the near future.

 

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