Dollar Inches Higher as Fed's Signals No Rush to Cut Rates

A teller sorts US dollar banknotes inside the cashier's booth at a forex exchange bureau in downtown Nairobi, Kenya February 16, 2024. REUTERS/Thomas Mukoya/File photo
A teller sorts US dollar banknotes inside the cashier's booth at a forex exchange bureau in downtown Nairobi, Kenya February 16, 2024. REUTERS/Thomas Mukoya/File photo
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Dollar Inches Higher as Fed's Signals No Rush to Cut Rates

A teller sorts US dollar banknotes inside the cashier's booth at a forex exchange bureau in downtown Nairobi, Kenya February 16, 2024. REUTERS/Thomas Mukoya/File photo
A teller sorts US dollar banknotes inside the cashier's booth at a forex exchange bureau in downtown Nairobi, Kenya February 16, 2024. REUTERS/Thomas Mukoya/File photo

The dollar inched up on Thursday after the Federal Reserve indicated it was in no rush to cut rates further this year due to uncertainties around US tariffs, while the pound slipped ahead of the Bank of England's policy decision.

The Swiss franc weakened slightly after the Swiss National Bank lowered its policy rate to 0.25%, while the Swedish crown was steady after its central bank held rates steady.

US policymakers projected two quarter-point interest rate cuts were likely later this year, the same median forecast as three months ago, even as they expect slower economic growth and higher inflation. On Wednesday, the Fed held its benchmark overnight rate steady in the 4.25%-4.50% range, Reuters reported.

"We're not going to be in any hurry to move," Fed Chair Jerome Powell said. "Our current policy stance is well-positioned to deal with the risks and uncertainties we face ... The right thing to do is to wait here for greater clarity about what the economy is doing."

Powell's comments and the Fed statement underscored the challenge faced by policymakers as they navigate President Donald Trump's plans to levy duties on imports from US trading partners and the impact on the economy.

"There is probably not enough in the Fed communication to build fresh USD shorts," said ING FX strategist Francesco Pesole.

Traders are pricing in 63 basis points of Fed easing this year, about two rate reductions of 25 bps each, and around a 50% chance of a third. Markets are fully pricing in the next cut in July, LSEG data showed.

The dollar index, which measures the US currency against six rivals, was 0.3% higher at 103.69 but stayed close to the five-month low of 103.19 touched earlier this week. The euro was down 0.3% at $1.0871.

EUROPE'S CENTRAL BANK BONANZA

Sterling touched a more than four-month high of $1.3015 in early Asian hours before retreating back to $1.2975 ahead of the BoE policy decision, where the central bank is expected to keep rates on hold.

With UK inflation stuck firmly above its 2% target, the BoE has cut borrowing costs by less than the European Central Bank and the Fed since last summer, contributing to the country's sluggish growth rate.

Data on Thursday showed pay growth was little changed and other signs of stability in the jobs market.

"The latest labour market data won't do much to build conviction amongst the Monetary Policy Committee as they continue to balance a weak economy and sticky inflation," said Matt Swannell, chief economic adviser to the EY ITEM Club.

"A decision to hold the bank rate later today seems inevitable."

The Swiss franc weakened slightly against the dollar and euro after its central bank cut its interest rate to 0.25%, its fifth successive cut, and said it was prepared to intervene in the FX market as necessary.

In a busy day for central banks, Sweden's central bank kept its policy rate unchanged at 2.25%, as expected.

The Swedish crown was slightly weaker against the stronger dollar and up on the softer euro. The crown has been the best performing major currency against the dollar this year on expectations of a ceasefire in Ukraine and improved domestic economic prospects.

The yen was a shade stronger at 148.54 per dollar, a day after the Bank of Japan kept rates steady and warned of heightening global economic uncertainty, suggesting the timing of further hikes will depend on the fallout from US tariffs.

The yen has risen nearly 6% this year as traders bet that the Japanese central bank will hike rates this year as well as benefiting from geopolitical tensions leading to safe asset flows.

Elsewhere, Turkey's lira was steady at 38 per dollar after plunging to a record low of 42 per dollar on Wednesday as authorities detained President Tayyip Erdogan's main political rival.

The Australian dollar fell 0.7% to $0.6312 after Australian employment posted a surprise fall in February, ending a strong run of impressive gains, as the red-hot labour market loosened a little, although the jobless rate remained steady.

The New Zealand dollar fell 1% to $0.5760 even as data showed the economy crawled out of a recession and grew at a faster-than-expected pace of 0.7% last quarter, although underlying details were soft.



Saudi Arabia Allows Contracting Exceptions for Firms without Regional HQ

The King Abdullah Financial District in Riyadh (Asharq Al-Awsat)
The King Abdullah Financial District in Riyadh (Asharq Al-Awsat)
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Saudi Arabia Allows Contracting Exceptions for Firms without Regional HQ

The King Abdullah Financial District in Riyadh (Asharq Al-Awsat)
The King Abdullah Financial District in Riyadh (Asharq Al-Awsat)

Saudi Arabia has introduced greater flexibility into its investment environment, allowing government entities, under strict controls to safeguard spending efficiency and ensure the delivery of critical projects, to seek exceptions to contract with international companies that do not have regional headquarters in the kingdom.

The Local Content and Government Procurement Authority notified all government bodies of the mechanism to apply for exemptions through the Etimad digital platform.

The step is designed to balance enforcement of the “regional headquarters relocation” decision, in force since early 2024, with the needs of technically specialized projects or those driven by intense price competition.

Under a government decision that took effect at the start of 2024, state entities, including authorities, institutions and government-affiliated funds, are barred from contracting with any foreign commercial company whose regional headquarters in the region is located outside Saudi Arabia.

According to the information, the Local Content and Government Procurement Authority informed all entities of the rules governing contracts with companies that lack a regional headquarters in the kingdom and related parties.

Government entities may request an exemption from the committee for specific projects, multiple projects or a defined time period, provided the application is submitted before launching a tender or initiating direct contracting procedures.

Submission mechanism

In two circulars, the authority detailed how to submit exemption requests and clarified the cases in which contracting is permitted under the controls. It said the exemption service was launched on the Etimad platform in November 2025.

The service is available to entities that float tenders through Etimad. Requests for tenders launched before the service went live, as well as those issued outside the platform, will continue to follow the previously adopted process.

Etimad is the kingdom’s official financial services portal run by the Ministry of Finance, aimed at driving digital transformation of government procedures and boosting transparency and efficiency in managing budgets, contracts, payments, tenders and procurement. The platform streamlines transactions between state entities and the private sector.

Technical criteria

When issuing the contracting controls, the government made clear that companies without a regional headquarters in Saudi Arabia, or related parties, are not barred from bidding for public tenders.

However, their offers can only be accepted in two cases: if there is no more than one technically compliant bid, or if the offer ranks among the best technically and is at least 25% lower in price than the second-best bid after overall evaluation.

Contracts with an estimated value of no more than 1 million riyals ($266,000) are also exempt. The minister may, in the public interest, amend the threshold, cancel the exemption or suspend it temporarily.

More than 700 headquarters

More than 700 multinational companies had relocated their regional headquarters to Riyadh by early 2026, exceeding the initial target of attracting 500 companies by 2030. The program seeks to cement the kingdom’s position as a regional business hub and to localize global expertise.

When announcing the contracting ban, Saudi Arabia said the move was intended to incentivize foreign firms dealing with the government and its affiliated entities to adjust their operations.

It aims to create jobs, curb economic leakage, raise spending efficiency and ensure that key goods and services procured by government entities are delivered inside the kingdom with appropriate local content.

The government said the policy aligns with the objectives of the Riyadh 2030 strategy unveiled during the recent Future Investment Initiative forum, where 24 multinational companies announced plans to move their regional headquarters to the Saudi capital.

It stressed that the decision does not affect any investor’s ability to enter the Saudi economy or continue working with the private sector.

 


IMF Board to Review Staff-level $8.1 Bln Agreement for Ukraine

The city's downtown on a frosty winter day, amid Russia's attack on Ukraine, in Kyiv, Ukraine February 19, 2026. REUTERS/Alina Smutko
The city's downtown on a frosty winter day, amid Russia's attack on Ukraine, in Kyiv, Ukraine February 19, 2026. REUTERS/Alina Smutko
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IMF Board to Review Staff-level $8.1 Bln Agreement for Ukraine

The city's downtown on a frosty winter day, amid Russia's attack on Ukraine, in Kyiv, Ukraine February 19, 2026. REUTERS/Alina Smutko
The city's downtown on a frosty winter day, amid Russia's attack on Ukraine, in Kyiv, Ukraine February 19, 2026. REUTERS/Alina Smutko

The International Monetary Fund on Thursday said its board ​would review a staff-level agreement for a new $8.1 billion lending program for Ukraine in coming days.

IMF spokeswoman Jule Kozack told reporters that Ukrainian authorities had completed the prior actions needed to move forward with the request ⁠of a new ⁠IMF program, including submission of a draft law on the labor code and adoption of a budget.

She said Ukraine's economic growth in 2025 ⁠was likely under 2%. After four years of war, the country's economy had settled into a slower growth path with larger fiscal and current account balances, she said, noting that the IMF continues to monitor the situation closely.

"Russia's invasion continues to take a ⁠heavy ⁠toll on Ukraine's people and its economy," Kozack said. Intensified aerial attacks by Russia had damaged critical energy and logistics infrastructure, causing disruptions to economic activity, Reuters quoted her as saying.

As of January, she said, 5 million Ukrainian refugees remained in Europe and 3.7 million Ukrainians were displaced inside the country.


US Stocks Fall as Iran Angst Lifts Oil Prices

A screen displays a stock chart at a work station on the floor of the New York Stock Exchange (NYSE) in New York City, US, April 6, 2022. REUTERS/Brendan McDermid
A screen displays a stock chart at a work station on the floor of the New York Stock Exchange (NYSE) in New York City, US, April 6, 2022. REUTERS/Brendan McDermid
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US Stocks Fall as Iran Angst Lifts Oil Prices

A screen displays a stock chart at a work station on the floor of the New York Stock Exchange (NYSE) in New York City, US, April 6, 2022. REUTERS/Brendan McDermid
A screen displays a stock chart at a work station on the floor of the New York Stock Exchange (NYSE) in New York City, US, April 6, 2022. REUTERS/Brendan McDermid

Wall Street stocks retreated early Thursday as worries over US-Iran tensions lifted oil prices while markets digested mixed results from Walmart.

US oil futures rose to a six-month high as Iran's atomic energy chief Mohammad Eslami said no country can deprive the Islamic republic of its right to nuclear enrichment, after US President Donald Trump again hinted at military action following talks in Geneva.

"We'd call this an undercurrent of concern that is bubbling up in oil prices," Briefing.com analyst Patrick O'Hare said of the "geopolitical angst."

About 10 minutes into trading, the Dow Jones Industrial Average was down 0.6 percent at 49,379.46, AFP reported.

The broad-based S&P 500 fell 0.5 percent to 6,849.35, while the tech-rich Nasdaq Composite Index declined 0.6 percent to 22,621.38.

Among individual companies, Walmart rose 1.7 percent after reporting solid results but offering forecasts that missed analyst expectations.

Shares of the retail giant initially fell, but pushed higher after Walmart executives talked up artificial intelligence investments on a conference call with analysts.

The US trade deficit in goods expanded to a new record in 2025, government data showed, despite sweeping tariffs that Trump imposed during his first year back in the White House.