Dollar drops after Powell’s comment

by Jonathan Adams

The euro rose 0.45% against the dollar to $1.0944

On Thursday, Federal Reserve Chairman Jerome Powell said the Fed is “not far ” from having enough confidence that inflation is moving toward its 2% target to begin cutting interest rates. The dollar depreciated across the board.

The euro initially slumped as the ECB left interest rates unchanged despite recognizing the need to curb inflation, but has since recovered to hit its highest daily value against the US dollar in about a month. The common currency hit a six-week high against a generally weak dollar.

We are waiting to become more confident that inflation is moving sustainably to 2%. When we do get that confidence, and we’re not far from it, it will be appropriate to begin to dial back the level of restriction so that we don’t drive the economy into recession, Powell said in a hearing before the Senate Banking Committee.

Chairman Powell told lawmakers on Wednesday that rate cuts remained likely in the coming months, but only if further signs of falling inflation warranted.

Powell seemed more dovish today than he did yesterday, Marc Chandler, chief market strategist at Bannockburn Global Forex, said.

Investors’ growing appetite for riskier assets, including stocks, also weighed on the dollar, Chandler said.

The euro rose 0.45% against the dollar to $1.0944.

The European Central Bank cautiously laid the foundations for interest rate cuts later this year.

We are making good progress towards our inflation target and we are more confident as a result – but we are not sufficiently confident, ECB President Christine Lagarde told a press conference.

Policymakers did not discuss cuts at this meeting, but Lagarde said they had just begun discussing reversing their restrictive stance.

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of Trading and Investment News. The information provided on Trading and Investment News is intended for informational purposes only. Trading and Investment News is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

Related Posts

    Sign up for our newsletter

    Get our latest downloads and information first. Complete the form below to subscribe to our weekly newsletter.

    © Copyright 2024-25
    Trading and Investment News.
    Managed By News Media International A Brand Of CAS Media Group Publishing Ltd whose registered office is – 12 Deer Park Road, Wimbledon, SW19 3TL.

    Latest articles