He global dollar fell into a volatile session, after the president of the Federal Reserve (Fed), Jerome Powell, He struck a somewhat cautious tone in his comments, suggesting the US central bank is likely to begin its easing cycle later this year.
At a conference on monetary policy held in Portugal, Powell said the US economy has made significant progress in terms of inflation, in comments that were considered moderate by analysts.
He dollar index, The index, which measures the performance of the U.S. currency against a basket of six major currencies, fell 0.1 percent to 105.71.
In front of and in, The greenback was trading stable at 161.48 units, after reaching 161.745 on Monday, its highest level in almost 38 years, driven mainly by the large difference in rates between United States and Japan.
He euro, Meanwhile, it was trading stable at $1.0741, showing little reaction to the comments of the president of the European Central Bank, Christine Lagarde, who participated in the same forum as Powell. Lagarde said that the euro zone is “well advanced” on the path to disinflation, but that there are “questions” about the prospects for economic growth.
The Fed’s Caution
Karl Schamotta, Corpay said: “Powell showed his cautious streak. In our view, he firmly put a rate cut on the table in September by acknowledging ‘significant progress’ in reducing inflation and pointing to the ‘two faces of risk’ facing policymakers as labor markets begin to cool,”
He added: “This is triggering a reversal in the rise in the performance of the bonds short-term that took place after last week’s presidential debate, and is forcing an adjustment in altitude in the dollar”.
Powell’s comments countered data showing that supply deals were employment U.S. job openings rose in May after declines in the previous two months. Job openings, a measure of labor demand, rose 221,000 to 8.14 million on the last day of May, according to the JOLTS report.
Source: Ambito
