Business Standard

Dollar index volatile after Fed's Jerome Powell comments on inflation

Powell struck a hawkish tone, as was widely expected, and said that the Fed's overarching focus is to bring price pressures back down to the Fed's target of 2%.

Photo: Paul Yeung/Bloomberg

Photo: Paul Yeung/Bloomberg

Reuters NEW YORK
By Karen Brettell
NEW YORK (Reuters) - The dollar index held at lower levels on Friday after Federal Reserve Chair Jerome Powell expressed concerns that inflation could become entrenched, despite volatility that initially sent the greenback bouncing off session lows, and then falling again.
Powell struck a hawkish tone, as was widely expected, and said that the Fed's overarching focus is to bring price pressures back down to the Fed's target of 2%. He added that the size of September's expected interest rate increase will depend on data that has come out since the Fed's July meeting.
The dollar index was last at 107.72, down 0.68% on the day. The euro gained 1.02% to $1.0073.
The dollar dipped earlier on Friday after data showed that U.S. consumer spending barely rose in July as a drop in gasoline prices weighed on receipts at service stations, and that monthly inflation slowed down considerably.
Atlanta Fed President Raphael Bostic said earlier on Friday that with data showing U.S. inflation is slowing, he is "leaning" toward supporting a 50 basis point rate hike in September on the way toward getting the policy rate to 3.5%-3.75% by year end.
Fed funds futures traders are pricing in a 55% chance of a Fed rate hike of another 75 basis points at its September meeting, compared with 45% before Powell's comments, and a 45% probability of a 50 basis points increase.
The euro also hit a session high against the greenback earlier on Friday after Reuters reported that some European Central Bank policymakers want to discuss a 75 basis points interest rate hike at the September policy meeting, even if recession risks loom, as the inflation outlook is deteriorating.
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Currency bid prices at 10:16AM (1416 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index 107.7200 108.4800 -0.68% 12.604% +108.7500 +107.5400
Euro/Dollar $1.0073 $0.9972 +1.02% -11.39% +$1.0090 +$0.9947
Dollar/Yen 136.7350 136.4800 +0.20% +18.79% +137.3350 +136.1900
Euro/Yen 137.73 136.14 +1.17% +5.69% +137.9600 +136.1000
Dollar/Swiss 0.9596 0.9637 -0.43% +5.20% +0.9659 +0.9579
Sterling/Dollar $1.1867 $1.1838 +0.27% -12.23% +$1.1900 +$1.1775
Dollar/Canadian 1.2924 1.2924 +0.01% +2.23% +1.2964 +1.2905
Aussie/Dollar $0.6993 $0.6981 +0.19% -3.78% +$0.7009 +$0.6952
Euro/Swiss 0.9665 0.9608 +0.59% -6.79% +0.9673 +0.9601
Euro/Sterling 0.8487 0.8428 +0.70% +1.04% +0.8488 +0.8427
NZ $0.6217 $0.6226 +0.06% -8.98% +$0.6232 +$0.6187
Dollar/Dollar
Dollar/Norway 9.6000 9.6540 -0.57% +8.96% +9.7005 +9.5840
Euro/Norway 9.6746 9.6275 +0.49% -3.38% +9.7001 +9.6345
Dollar/Sweden 10.4894 10.5862 +0.15% +16.32% +10.6186 +10.4778
Euro/Sweden 10.5668 10.5513 +0.15% +3.25% +10.5910 +10.5500
 
(Editing by Chizu Nomiyama)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Aug 26 2022 | 9:00 PM IST

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