Currency Chaos: Dollar Peaks and Yen Slides amid Global Market Reactions

The dollar slipped after reaching a two-year peak, influenced by the Federal Reserve's announcement of slower rate cuts in 2025. The yen, along with other currencies, tumbled following the Bank of Japan's rate decision. Market volatility ensued, characterized by thin trading volumes prior to the holiday period.

The dollar experienced a downward trend on Thursday after achieving a two-year peak due to the Federal Reserve's news of a gradual rate cut schedule for 2025. This announcement caused global currencies to initially dip, although they rebounded amidst thin holiday trading volumes.

The Bank of Japan maintained steady interest rates, leading to a sharp decline in the yen. Governor Kazuo Ueda provided no new indications of immediate policy changes, emphasizing the need to analyze future economic data, which disappointed market expectations that anticipated potential tightening.

Market volatility persisted as many currencies found grounding against the strengthening dollar. The Canadian dollar and South Korean won were notably affected, reaching multi-year lows before recovering slightly. Investors are closely monitoring international economic indicators for any signs of further shifts.

(With inputs from agencies.)