Jay Powell Calms Market, Projects Three Rate Cuts: Euro Surges, Dollar Weakens

Federal Reserve Chairman Jay Powell aimed to allay market concerns about the timing of rate cuts, confirming that borrowing costs would be reduced three times within the year. This assurance came as the euro surged by 1%, surpassing the $1.0940 mark.

Powell's announcement followed the Federal Reserve's projection of three rate cuts in 2024. Powell is slated to address the public again on Friday, adding further anticipation to his statements. As the EURUSD pair experienced a significant uptick following Powell's remarks, the dollar weakened against major currencies.

Powell's acknowledgment of inflation resilience coupled with the Fed's anticipation of maintaining rates in the upcoming April meeting with expectations of a rate cut in June has influenced market sentiment. In response, the USDJPY pair witnessed a retreat of approximately 100 pips, hovering around the ¥151.00 level, while the GBPUSD pair remained near the $1.28 threshold.

Investors are eagerly awaiting Powell's insights during the Fed Listens event on Friday, which will center on current economic conditions.