PT Solid Gold Berjangka | Dollar Firm on Powell Caution, Kiwi Bides Time Before Rates Decision
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Solid Gold Berjangka | The dollar rebounded from a three-week low after Federal Reserve Chairman Jerome Powell expressed caution about the timing of an interest rate cut.The New Zealand dollar rallied ahead of the central bank’s rate decision, with traders wary of signals on the timing of policy easing.
Chairman Powell said on the first day of congressional testimony that a rate cut would not be appropriate until there is “greater confidence” that inflation is headed toward the 2% inflation target.However, noting the cooling job market, Chairman Powell said, “We now face two-sided risks,” and that we can no longer focus solely on inflation.
The dollar index against six major currencies, including the euro and yen, was flat at 105.11 early Asian time after rising about 0.1% on Tuesday. On Monday, it had fallen to its lowest level since June 13 following an unexpectedly soft jobs report.Traders cut the probability of a rate cut by September to about 73% from 76% the day before, with a second rate cut largely priced in by December.
Taylor Nugent, senior market economist at National Australia Bank, said, “Chairman Powell was careful not to commit in advance to a path that could easily be altered by the flow of data.Even if the market is looking at the possibility of a September rate hike, three consumer price indexes and two jobs reports are on the horizon, making it difficult to consolidate further.”After testifying before the Senate, Chairman Powell will address the House later Wednesday. On Thursday, the Consumer Price Index (CPI) for June will be released.
The dollar rose 0.07% to 161.41 yen.
The euro was flat at $1.0815.
The Australian dollar was little changed at $0.6739, close to Monday’s six-month peak of $0.67615.
Source: Reuters