DXY Fundamental analysis – On Friday, the dollar index neared 102.5 after John Williams, the President of the New York Federal Reserve, spoke with CNBC. He stated that the central bank is not currently considering rate cuts, and it’s too early to think about reducing rates in March. Following these comments, the likelihood of a March rate cut dropped to 65% from 75%.
Earlier in the week, the Federal Reserve indicated 75 basis points (bps) of interest rate cuts for next year, a quicker pace than the one forecasted in September, which led to speculation that the first cut could happen as early as March. Concurrently, the European Central Bank (ECB) and the Bank of England (BOE) kept their policy rates unchanged, committing to maintain them at high levels to combat inflation. The dollar saw its most significant gains against the Euro and the British pound. However, over the course of the week, the dollar experienced a decline of about 1.5%.