Dollar falls as yen rises ahead of Federal Reserve Chairman Powell's speech

(MENAFN) On Friday, the dollar experienced a decline as traders awaited insights from Federal Reserve Chairman Jerome Powell, while the Japanese yen gained strength following remarks from Bank of Japan Governor Kazuo Ueda. The yen appreciated by 0.3 percent to 145.82 against the dollar, buoyed by Ueda's reaffirmation of the Bank of Japan's intention to tighten monetary policy if inflation trends toward its 2 percent target. Ueda's comments, delivered during a parliamentary session, highlighted ongoing market volatility that could influence the central bank's inflation outlook.

In contrast, the dollar index, which measures the greenback against a basket of six major currencies, fell by 0.11 percent to 101.37, hovering near a 2024 low of 100.92 reached earlier in the week. The index is poised for its fifth consecutive week of losses. Market participants are closely monitoring Powell's upcoming speech at the Federal Reserve's research conference in Kansas City for indications regarding potential changes in U.S. interest rates. According to the CME FedWatch tool, there is a 76 percent probability that the Fed will implement a 25 basis point rate cut at its September meeting, with the likelihood of a larger 50 basis point cut having diminished.

Meanwhile, the euro edged up 0.1 percent to USD1.1123, nearing a 13-month high from earlier in the week, while the pound rose 0.2 percent to USD1.3125, remaining below a 13-month peak achieved on Thursday. Powell's address later in the day is anticipated to provide crucial clues on the future direction of U.S. monetary policy, influencing both domestic and global financial markets.  

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