Dollar Holds Steady Globally After Fed Chair Remarks, Gains Against Shekel
The US dollar remained stable against a basket of major currencies after offsetting gains from the previous day, following comments by Federal Reserve Chair Kevin Warsh. Speaking at an international panel, Warsh noted that inflation expectations and risks have eased in recent weeks ahead of the key US employment report due at 15:30 today. He also cautioned that policymakers will decide on interest rate hikes at their next meeting and warned against seeking explicit future guidance from him.
In the local Israeli currency market, the dollar strengthened to 2.99 shekels from 2.979 shekels the previous day, while the euro traded slightly higher at 3.40 shekels. Or Furia, chairman of Furia Finance, said the shekel-dollar exchange has been relatively stable recently but expects the shekel to strengthen in the medium to long term as uncertainty fades and fundamental factors supporting the Israeli currency reassert themselves.
The Japanese yen, which hit a 40-year low against the dollar yesterday, rebounded as the US dollar weakened. Japan’s finance ministry faces a dilemma over intervening to support the yen, with officials reportedly more tolerant of the yen’s weakness due to broad dollar strength and falling oil prices easing inflationary pressures. Market watchers anticipate possible intervention around the US public holiday on Friday, although some analysts doubt the effectiveness of such moves in low liquidity conditions.
The dollar’s support also stems from rising expectations of Federal Reserve rate hikes this year amid inflation well above the 2% target. However, many analysts predict inflation will improve in coming months. US labor market strength, with job additions exceeding forecasts over the past three months, bolsters growth outlooks. The upcoming June employment data is expected to show 110,000 new jobs added and unemployment steady at 4.3%, according to Reuters economists’ median estimates.
Elsewhere, the euro weakened slightly against the dollar following early data showing Eurozone inflation fell below 3% in June, easing pressure on the European Central Bank to raise rates. In cryptocurrency markets, Bitcoin rose 2.14% to nearly $60,000 after earlier dropping to its lowest level since September 2024.