The outlook for the greenback remained bearish as the Fed nears the end of its tightening cycle and markets anticipate rate cuts by the end of the year, analysts say.
In a question and answer session before the Economic Club of Washington on Tuesday, Powell said interest rates may have to rise more than expected if the US economy remains strong.but reiterated that he felt a “disinflation” process was underway.
“The dollar weakened because Powell was not aggressive. There were some points in his speech that suggested the jobs report hasn’t materially changed the Fed’s outlook,” said Thierry Wizman, global rates and currency strategist at Macquarie in New York. York.
The president of the New York Fed, John Williams, joined on Monday the views of continuing to raise rates in the United States, at an event, in which he said that moving to a rate of 5% and 5.25% “It seems like a very reasonable view of what we’ll need to do this year to reduce supply-demand imbalances.”
In afternoon trade, the euro eased slightly higher to $1.0724, after falling to $1.067 in the previous session, its lowest level since January 9. However, it was still well above the 20-year low reached in September of $0.953.
Investors were also taking in hardline comments from two German officials at the European Central Bank (ECB).
“From my point of view, we need more significant rate hikes,” German central bank chief Joachim Nagel told the Boersen-Zeitung newspaper on Tuesday.
His colleague Isabel Schnabel said it was not yet clear that the ECB’s rate hikes so far would bring inflation back to 2%.
Source: Ambito
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