By Saqib Iqbal Ahmed <\/p>\n
NEW YORK, July 29 (Reuters) – The U.S. dollar fell across the board on Wednesday after the Federal Reserve held interest rates steady, a choice that may intensify questions about how U.S. central bank chief Kevin Warsh \u200cwill deliver on his commitment to bring inflation back down to the 2% target. <\/p>\n
The widely expected decision to leave the benchmark \u200cinterest rate in the 3.50%-3.75% range drew dissents from three of the 12 members of the policy-setting Federal Open Market Committee who “preferred” a quarter-percentage-point hike at this meeting. <\/p>\n
In \u200bleaving the policy rate pinned in the range it has been since December, Fed policymakers are embracing the idea that current borrowing costs are creating enough friction in the economy to reduce any inflation that isn’t, like the effect of tariffs on goods prices, expected to fade on its own. <\/p>\n
“Thus far, very dollar-negative decision, but in previous meetings, the first reaction may be the wrong one,” said Juan Perez, director of trading at Monex \u200cUSA in Washington. <\/p>\n
“We believe that for the remainder \u2060of the year, the Fed will hesitate and not hike rates,” he said. <\/p>\n
Referring to the three dissenting votes favoring rate hikes versus the Federal Open Market Committee decision to hold the federal funds rate steady, Warsh said \u2060at a press conference that “I asked for a good family fight, and I got one. That’s the purpose. That’s the design feature,” adding “there was a large majority support for the decision that we made in the room.” <\/p>\n
The dollar index, which tracks the U.S. currency against a basket of six others, fell \u200b0.3% \u200bto 101.07. The euro rose 0.4% to $1.14315, while sterling rose 0.4% to $1.3342. <\/p>\n
“We expect \u200bWarsh to remain vigilant about inflation but to acknowledge \u200cthat the recent subdued inflation prints could indicate the possibility that the current stance of policy is appropriate, which is also our view,” said Christopher Hodge, chief U.S. economist at Natixis. <\/p>\n
“If that is not the case, the Fed stands ready to stamp out any price pressures,” Hodge said. <\/p>\n
Meanwhile, hostilities in the Middle East flared anew, sending oil prices higher, after joint strikes by U.S. and Saudi Arabia on Iran-backed groups in Iraq. <\/p>\n
The strikes came hours after the U.S. military said it had averted a surprise Iranian attack on U.S. troops in the region. <\/p>\n
The dollar fell \u200c0.3% against the yen to 163.35, but remained not far from a 40-year high \u200band kept traders on alert for potential intervention from Japanese authorities to support it. <\/p>\n
The \u200bBank of Japan is set to keep interest rates steady \u200bon Friday but leave scope for further hikes with hawkish communication, as the economy faces mounting inflationary pressure \u200cfrom the Middle East war, a weak yen and robust \u200bglobal AI demand. <\/p>\n
“Comments from the MoF \u200bhave shifted from intervention-related threats to growth-oriented tax cuts,” Shaun Osborne, chief currency strategist at Scotiabank, said in a note. <\/p>\n
“We see considerable risk into the end of the week, and note the potential for domestically-driven strength if BoJ policymakers deliver a hawkish hold \u200band seek to build on the 25 bpts \u200cof tightening (by December) currently priced into the short-term rates market,” Osborne wrote. <\/p>\n
In cryptocurrencies, bitcoin rose about 1% to $64,435. <\/p>\n
(Reporting by Saqib \u200bIqbal Ahmed in new york; Additional reporting by Saeed Azhar in new York, Rae Wee in Singapore and Siddarth \u200bS in Bengaluru; Editing by Arun Koyyur, David Holmes and Nick Zieminski) <\/p>\n","protected":false},"excerpt":{"rendered":"By Saqib Iqbal Ahmed NEW YORK, July 29 (Reuters) – The U.S. dollar fell across the board on…\n","protected":false},"author":2,"featured_media":574443,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,242344,113,18913,1961,61,1095,5232,60,66147],"class_list":["post-574442","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-christopher-hodge","tag-economy","tag-federal-open-market-committee","tag-federal-reserve","tag-ie","tag-inflation","tag-interest-rates","tag-ireland","tag-kevin-warsh"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/574442","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=574442"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/574442\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/574443"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=574442"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=574442"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=574442"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}