On Thursday, the dollar index hovered around 107.8 as traders reacted to fresh economic data.
Dollar fluctuates as US GDP misses expectations
The US economy expanded at an annualized rate of 2.3% in Q4, falling short of the 2.6% growth forecast but still reflecting robust economic activity driven mainly by resilient consumer spending. Meanwhile, Personal Consumption Expenditures (PCE) prices increased slower than anticipated, and initial jobless claims came in lower than expected, signaling a tight labor market.
On Wednesday, the Federal Reserve held interest rates steady, as anticipated. Officials noted that they are awaiting further progress on inflation while acknowledging the ongoing strength of the economy. The GDP figures for Q4 supported the Fed's outlook, reinforcing their cautious approach to future rate decisions.
ECB cuts rates, hints at further easing
Across the Atlantic, the European Central Bank (ECB) cut borrowing costs by 25 basis points, in line with expectations, and signaled that it is not yet finished with its rate-cutting cycle. This kept investors focused on potential further monetary easing in the eurozone.
