Dollar remains stable: The dollar remained stable on Thursday as investors awaited a series of business activity reports to assess the economic health of major countries and its potential impact on global interest rates.

Upcoming Flash Purchasing Managers' Index (PMI) figures from the US, the UK, and the eurozone are anticipated later in the day, offering insights into the performance of their manufacturing and service sectors.

During early Asian trading, the euro strengthened by 0.11 per cent to $1.0831, while the British pound remained unchanged at $1.2638. Against the yen, the dollar saw a slight uptick and surpassed the 150 mark to 150.34 yen.

Matt Simpson, senior market analyst at City Index, remarked, “A look at the composite PMIs for the US, Europe, and the UK indicates either an acceleration in growth or a deceleration at a slower pace. This suggests potential upward pressure on growth and inflation, which aligns with the narrative of a prolonged period of higher rates that traders are cautious about.”

Central banks, particularly the Federal Reserve and the European Central Bank, have been firm in pushing back against market expectations for multiple rate cuts this year, citing persistent inflationary pressures and the risk of premature easing.

Minutes from the Fed's recent policy meeting, released on Wednesday, reiterated the central bank's stance against immediate rate cuts, which officials still anticipate sometime this year.

Tony Sycamore, a market analyst at IG, commented, “The Fed's minutes didn't reveal much beyond what was discussed in the FOMC meeting. Market sentiment regarding the timing of Fed rate cuts remains uncertain. Stronger core PCE figures expected next week further postpone expectations of rate cuts in the US.”

Market traders currently estimate around a 30 per cent likelihood of the Fed initiating rate cuts in May, a major decrease from over 80 per cent estimated a month ago, according to the CME FedWatch Tool.

The adjustment in rate expectations follows recent data showing higher-than-expected producer and consumer prices in the US, coupled with ongoing strength in the country's labor market.

In other currencies, the Australian dollar saw a 0.07 per cent increase to $0.65565, while the New Zealand dollar reached a one-month high of $0.6198.

The Reserve Bank of New Zealand (RBNZ) is scheduled to meet next week, with economists generally anticipating the bank to maintain the cash rate at 5.5 per cent, although there is some speculation about a possible hike.

The dollar index experienced a slight decline of 0.06 per cent to 103.92.

(With Reuters Inputs)

Against the yen, the dollar saw a slight uptick and surpassed the 150 mark to reach 150.34 yen.

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