Dollar Rises as Federal Reserve Chairman’s cautious tone over interest rate cuts
Date
7/10/2024 3:19:29 AM
(MENAFN) On Wednesday, the dollar experienced a rebound from its three-week low following remarks by Federal Reserve Chairman Jerome Powell, who adopted a cautious stance on the prospect of U.S. interest rate cuts. During his initial testimony before Congress on Tuesday night, Powell emphasized that a rate cut would not be considered appropriate until the Federal Reserve had greater confidence that inflation was progressing towards its 2 percent target.
The dollar index, which tracks the greenback against six major currencies including the euro and the yen, remained steady at 105.14 points after a 0.1 percent rise on Tuesday. The index had previously dropped to its lowest level since June 13, following unexpectedly weak U.S. jobs data. Market sentiment shifted, with traders now estimating a 73 percent probability of a rate cut by September, slightly down from 76 percent the previous day. Expectations for another rate cut by December remain prevalent.
Following his testimony before the Senate, Powell is set to address the House of Representatives later on Wednesday. Market participants are also anticipating the release of June CPI data on Thursday, which could provide further insights into inflation trends.
In currency movements, the dollar rose by 0.13 percent to 161.525 yen, while the euro held steady at USD1.0815. The Australian dollar saw a slight decline of 0.1 percent to USD0.67345, though it remained near a six-month high of USD0.67615 achieved on Monday.
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