U.S. Dollar Boosted by Rising Market Liquidity

The U.S. dollar rose on Friday by approximately 0.31% against most major currencies, according to levels recorded by the Dollar Index which is standing at 104.114, at the time of writing. This uptick capitalized on a retreat in risk appetite across financial markets, which triggered declines in U.S. stocks and other risk-sensitive assets.

The stock pullback stemmed from remarks by Federal Reserve Governor and New York Fed President John Williams, who leaned toward maintaining interest rates for an extended period. His comments fueled a drop in equities, boosting market liquidity—a dynamic that favors the American currency.

Williams noted, “The current monetary policy involves a modest degree of tightening, and I see the Fed’s current stance as entirely appropriate given the labor market’s strength, while inflation rates continue to exceed our 2.00% target.”

The Dollar Index, which tracks the U.S. currency’s performance against a basket of major peers, climbed to 104.13 points, up from the previous day’s close of 103.8 points. During Friday’s trading, the index dipped to a low of 103.76 points but peaked at 104.22 points, reflecting the dollar’s firm footing amid shifting market currents.