Forex Frenzy: Dollar Soars Amid Stock Volatility and UK Rate Stalemate

The dollar rose to a two-week peak on Thursday as fresh volatility hit stock markets. It moved ahead against the pound, which suffered after the Bank of England maintained UK rates in a narrow vote. Attention now shifts to the European Central Bank’s meeting, expected to hold interest rates steady.

The dollar index, measuring the U.S. currency against six others, climbed 0.15% to 97.82, marking its second consecutive day of gains. 'There's a bit of risk aversion coming through,' remarked Sim Moh Siong, currency strategist at OCBC in Singapore. Meanwhile, financial markets are gauging U.S. corporate earnings, halfway through the season.

Gold and silver experienced heightened volatility, with silver plummeting 16.6% to $73.41. Stocks took a hit as the Nasdaq Composite fell 2.9% in two days—its largest drop since October—driven by Google's spending plans and a downturn in software stocks due to generative AI trends.