Global Currencies in Flux: Dollar Peaks and Yen Dips Amid Central Bank Decisions

The dollar hit a two-year peak following the Federal Reserve's indication of slower rate cuts in 2025. The yen slid after the Bank of Japan held rates steady. The Federal Reserve's hawkish stance influenced markets worldwide, triggering currency fluctuations, while investors eye potential BOJ moves.

The dollar experienced a slip on Thursday after reaching a two-year high, driven by the Federal Reserve's announcement of a slower pace in rate cuts for 2025. The Bank of Japan's (BOJ) decision to maintain steady interest rates caused a significant decline in the yen amidst thin trading conditions pre-holiday.

The BOJ's rate decision followed Federal Reserve's hawkish tone, leaving investors anticipating more easing measures, but Governor Kazuo Ueda offered little new information during his post-meeting briefing. Investors remain cautious, awaiting further data to assess economic outcomes potentially influenced by U.S. policies.

Globally, currencies reacted to the Fed's unexpected stance, with the dollar index declining 0.25% after a significant surge. Meanwhile, the euro and British pound faced volatile shifts amid low trading volumes. Market analysts predict sustained dollar strength as global economic conditions unfold.

(With inputs from agencies.)