The US dollar experienced its largest single-day gain since November, recovering from a week-long decline. This resurgence followed statements from US Treasury Secretary Scott Bessent affirming the administration’s support for a robust currency. The Bloomberg dollar index climbed 0.4 per cent, offsetting some of the losses incurred over the previous four sessions. These gains were sustained after the Federal Reserve maintained policy rates on Wednesday, following three consecutive cuts since September, citing indications of economic improvement.
The dollar’s rebound partially reversed Tuesday’s slide, which was triggered by President Donald Trump’s comments indicating his comfort with the currency’s decline. In response to those remarks, the dollar had fallen to its lowest level in almost four years, causing some instability in the US Treasury market and pushing long-term yields upwards. Bessent, in an interview with CNBC, clarified that “the US always has a strong dollar policy.”
Furthermore, Bessent dismissed speculation of US intervention in the Japanese currency market, stating the US was “absolutely not” intervening. Erica Camilleri, a senior global macro analyst at Manulife Investment Management, noted that “Bessent’s comments soothed investor concerns,” and “helped restore confidence in the administration’s currency policy.” Manulife Investment Management is a global wealth and asset manager. They provide financial advice, insurance, and wealth and asset management solutions for individuals, groups, and institutions.
The US dollar strengthened against seven of the ten major currencies, including the yen, which weakened by 0.75 per cent. These movements suggest a renewed confidence in the dollar’s stability following clarification of the US currency policy.
