The US dollars extended its gains in the foreign exchange market on Wednesday, maintaining its bullish momentum against major currencies except for a slight decline against the Canadian dollar.
Investors remained cautious ahead of the release of US durable goods orders data for February, which could provide further direction for the greenback.
Despite a strong rally between September and January, the dollar index (DXY) has been on a downward trajectory in the first quarter of 2025, slipping by approximately 4%. As of Wednesday, it stood at 104.28, reflecting ongoing market fluctuations.
In the currency markets, the euro weakened, with the EUR/USD pair trading at 1.0791, down from 1.0795 at Tuesday’s close. The European Central Bank’s next policy meeting, scheduled for April 16-17, remains a key focus for traders. Meanwhile, the British pound also lost ground, falling to 1.2907 from 1.2946, after UK inflation slowed to 2.8% in February, raising speculation about potential rate adjustments ahead of the Bank of England’s May 8 meeting.
The Japanese yen saw a slight depreciation, with USD/JPY rising to 150.1750 from 149.8934. Japan’s leading economic index increased more than expected in January, although the pace of growth slowed compared to the previous month. Market participants are now looking ahead to the Bank of Japan’s upcoming policy meeting on April 30-May 1.
Against the Canadian dollar, the US dollar edged lower to 1.4250 from 1.4281 as traders awaited Canadian wholesale sales data. The Bank of Canada’s policy decision on April 16 remains a critical event for market participants assessing the direction of monetary policy in the region.
Elsewhere, the euro extended its decline, slipping to a three-week low of $1.0776 after reaching a five-month high earlier in March. The Russian ruble, however, strengthened by 0.5% to 84.20 following reports of a US-brokered agreement with Russia and Ukraine to pause attacks at sea and on energy infrastructure.
