Volkswacht Bodensee - US dollar rises as expectations for imminent Fed rate cut ebb

Statements over the last day or so from New York Federal Reserve Bank President John Williams and Fed Governor Michelle Bowman have helped lift US Treasury yields as investors bet that the Fed will cut interest rates fewer times, if at all, in 2024, than was initially expected.

Boris Kovacevic, global macro strategist at Convera, said it has become "a perfect environment for the Greenback to shine," according to a post on X, the former Twitter.

Besides the shift in Fed policy, Kovacevic said the greenback is benefiting as a "haven" investment amid geopolitical worries and by other central banks signaling they will soon cut interest rates.

However, the shifting central bank outlook has weighed on US equities.

After gains by bourses in Europe and Asia, the Dow eked out only a modest gain Thursday, but both the S&P 500 and Nasdaq fell.

"Price action feeds on itself," Karl Haeling of LBBW said of the lackluster session. "People see the market going down and they say, 'Get me out'."

Back in currency markets, the yen and won were in focus after US Treasury Secretary Janet Yellen joined her Japanese and South Korean counterparts in saying they were keeping an eye on movements.

The statement came after South Korea's Choi Sang-mok and Japan's Shunichi Suzuki shared "serious concerns" on the recent weakness of their currencies and agreed to take "appropriate actions" to counter extreme volatility.

Analysts said the statement with Yellen suggested Washington would not push back against intervention by the countries.

The yen has lost almost nine percent this year and the won about seven percent.

"The fact that the yen has resumed its selling suggests traders are now either testing the patience of authorities or calling their bluff, as verbal intervention has so far been ineffective," said Fawad Razaqzada, market analyst at City Index and FOREX.com.

- Key figures around 2030 GMT -

New York - Dow: UP 0.1 percent at 37,775.38 (close)

New York - S&P 500: DOWN 0.2 percent at 5,011.12 (close)

New York - Nasdaq Composite: DOWN 0.5 percent at 15,601.50 (close)

London - FTSE 100: UP 0.4 percent at 7,877.05 (close)

Paris - CAC 40: UP 0.5 percent at 8,023.26 (close)

Frankfurt - DAX: UP 0.4 percent at 17,837.40 (close)

EURO STOXX 50: UP 0.5 percent at 4,936.57 (close)

Tokyo - Nikkei 225: UP 0.3 percent at 38,079.70 (close)

Hong Kong - Hang Seng Index: UP 0.8 percent at 16,385.87 (close)

Shanghai - Composite: UP 0.1 percent at 3,074.22 (close)

Dollar/yen: UP at 154.67 yen from 154.39 yen on Wednesday

Euro/dollar: DOWN at $1.0645 from $1.0673

Pound/dollar: DOWN at $1.2438 from $1.2454

Euro/pound: DOWN at 85.57 pence from 85.69 pence

West Texas Intermediate: UP less than 0.1 percent at $82.73 per barrel

Brent North Sea Crude: DOWN 0.2 percent at $87.11 per barrel

burs-jmb/md

C.Bruderer--VB