FX.co ★ US Dollar Index Rebounds

The dollar index increased to 104 on Thursday, recovering after a decline to a five-month low of 103.2 earlier in the week. This rebound occurred despite a drop in Treasury yields and dovish signals affecting currencies within the DXY. The Swiss National Bank (SNB) reduced its key interest rate, expressing caution about preventing the franc from strengthening amid heightened demand for safe assets. Meanwhile, the Bank of England (BoE) and the Riksbank opted to maintain their interest rates, highlighting concerns over potential growth risks. This context follows the Federal Reserve's decision to keep its rates unchanged, aligning with expectations. Notably, the Federal Open Market Committee (FOMC) adjusted its projections, reducing expected growth figures while increasing unemployment forecasts. Fed Chairman Jerome Powell commented on the anticipated temporary effect of tariffs on inflation. Additionally, the dollar supply is likely to rise as the Federal Reserve has reduced its balance sheet runoff by $20 billion per month, forecasting that this decreased runoff will persist, even if the Treasury stabilizes its account following the resolution of debt ceiling issues.