The dollar fell from one-month highs on Tuesday after U.S. Federal Reserve Chair Jerome Powell doubled down on statements last week that disinflation has started, as he expects significant declines in inflation this year.
The greenback dropped across the board, led by losses versus the yen, Swiss franc, as well as the Australian and New Zealand dollar.
The Fed chief did say that the return to the U.S. central bank's inflation goal would be a
bumpy process , which would need further rate increases.
"Powell reiterated that he sees declines in inflation coming and that means he may be able to be less hawkish in terms of tightening policy," said Shawn Cruz, head trading strategist at TD Ameritrade in Chicago.
The dollar index , which measures the performance of the greenback against a basket of six other currencies, fell to session lows after Powell's remarks. It was last down 0.2% at 103.34. U.S. interest-rate futures show that markets are expecting the Fed funds rate to peak just above 5.1% by June, compared with expectations of a peak below 5% prior to Friday's jobs report. Friday's U.S. jobs report wrongfooted traders who were banking on an imminent pause in the Fed's rate-hike cycle, and gave the dollar a leg up. The euro was little changed at $1.0725 after falling to a five-week low of $1.0670. The dollar dropped 1.2% versus then yen to 131 yen . Sterling was up slightly against the dollar $1.2031 after tumbling to a one-month low of $1.1974 in the previous session. ======================================================== Currency bid prices at 1:28PM (1828 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change
Session
Dollar index 103.4200 103.6000 -0.15% -0.068% +103.9600 +102.9900
Euro/Dollar $1.0720 $1.0726 -0.06% +0.05% +$1.0767 +$1.0670
Dollar/Yen 131.0700 132.6300 -1.17% -0.03% +132.7000 +130.4700
Euro/Yen 140.50 142.24 -1.22% +0.15% +142.3300 +140.2900
Dollar/Swiss 0.9228 0.9285 -0.66% -0.25% +0.9289 +0.9194
Sterling/Dollar $1.2022 $1.2022 +0.00% -0.59% +$1.2094 +$1.1962
Dollar/Canadian 1.3423 1.3446 -0.17% -0.93% +1.3469 +1.3382
Aussie/Dollar $0.6940 $0.6883 +0.84% +1.81% +$0.6988 +$0.6882
Euro/Swiss 0.9891 0.9956 -0.65% -0.03% +0.9958 +0.9873
Euro/Sterling 0.8914 0.8921 -0.08% +0.79% +0.8940 +0.8898
NZ $0.6316 $0.6305 +0.21% -0.50% +$0.6358 +$0.6274
Dollar/Dollar
Dollar/Norway 10.3500 10.3400 -0.10% +5.26% +10.4305 +10.2950
Euro/Norway 11.1048 11.0847 +0.18% +5.77% +11.1526 +11.0571
Dollar/Sweden 10.5922 10.6244 -0.31% +1.77% +10.6726 +10.5347
Euro/Sweden 11.3548 11.3901 -0.31% +1.84% +11.4052 +11.3377
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World FX rates ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Carolina Mandl
Editing by Marguerita Choy)
