The dollar remained stable on Thursday after experiencing its most significant rally since early June, as traders awaited insights from key Federal Reserve officials later in the day regarding the potential pace of interest rate cuts.

The U.S. currency made a strong recovery overnight from a more than one-year low against the euro and a 2.5-year low versus the British pound.

Although no specific catalyst for the rebound was evident, investors appeared to adopt a more nuanced perspective on the future aggressiveness of U.S. rate hikes, with Fed speakers this week expressing varied opinions on the path ahead.

On Wednesday, Fed Governor Adriana Kugler expressed strong support for the recent decision to reduce rates by half a percentage point to initiate the easing cycle but did not elaborate on her preferences for the subsequent pace of reductions.

Earlier in the week, Chicago Fed President Austan Goolsbee indicated that policymakers should avoid falling behind the curve to ensure a soft landing for the economy, while Atlanta Fed President Raphael Bostic stated that the central bank need not rush to lower rates.

"I don't sense any strong consensus at this point," noted Kenneth Crompton, chief rates strategist at National Australia Bank (OTC). "It feels like they've caught up...and moving forward, it’s likely to be more 25s than 50s."

Later on Thursday, Fed Chair Jerome Powell will deliver pre-recorded remarks at a conference in New York, where New York Fed President John Williams will also speak. Boston Fed President Susan Collins and Fed Governors Michelle Bowman and Lisa Cook will address audiences at various other venues.

Weekly U.S. jobless claims data will be closely monitored later on Thursday, given the Fed's shift in focus towards employment rather than inflation.

"If significant labor market weakening from the Fed is required to justify market pricing for at least one more 50 basis point cut this year, the jobless claims data is our best high-frequency indicator," Crompton stated.

Traders continue to anticipate a second substantial 50-basis point rate cut at the Fed's next meeting in November, though the likelihood has slightly decreased to 57.4% from 58.2% a day earlier, according to the CME Group's (NASDAQ) FedWatch Tool.

As of 0034 GMT, the dollar index, which gauges the currency against the euro, sterling, yen, and three other major peers, dipped 0.07% to 100.87 after a 0.57% increase on Wednesday, marking its largest single-day gain since June 7.

The euro remained mostly unchanged at $1.1135, having sharply retreated from a peak of $1.1214, the highest level since July of the previous year. Meanwhile, sterling was steady at $1.3322 after reaching $1.3430 on Wednesday, a level not seen since February 2022.

The yen strengthened by about 0.15% to 144.57 per dollar, recovering from a three-week low of 144.845 hit in the previous session.

Minutes from the Bank of Japan's July meeting, which saw the central bank raise short-term interest rates, revealed a division among policymakers on the speed of further rate increases.

The Australian dollar gained 0.15% to $0.68335, rebounding after Wednesday's sharp decline from a 19-month high of $0.6908.

The Chinese yuan remained steady at 7.0284 per dollar in offshore trading after retreating from its highest level since May of last year at 6.9952.

The Swiss franc held steady at 0.8499 per dollar ahead of a central bank policy announcement on Thursday, where a third consecutive quarter-point rate cut is widely anticipated.

In the cryptocurrency market, bitcoin dipped 0.8% to $62,915.

Paraphrasing text from "Reuters" all rights reserved by the original author.