Yahoo Finance U.S. Dollar Falls on Continued Fed-Driven Momentum
Investing.com - The U.S. dollar extended losses made earlier this week on continued Fed-driven momentum.
The U.S. dollar index that tracks the greenback against a basket of other currencies slipped 0.1% to 96.532 by 1:10 AM ET (05:10 GMT).
U.S. Federal Reserve chairman Jerome Powell said this week that the central bank will “act as appropriate” as policymakers consider "uncertainties" emanating from slowing investment, trade disputes and other issues affecting the global economy.
In addition to Powell’s testimony, which warned of extended “uncertainty” weighing on the economic outlook, the minutes of the Fed’s last policy meeting also warned that some members “judged that uncertainties and downside risks surrounding the economic outlook had increased significantly over recent weeks.”
At his second day of congressional testimony, Powell said the central bank has room to ease monetary policy as relationship between inflation and jobless rates diminished.
“The relationship between unemployment and inflation became weak” about 20 years ago, Powell told the Senate Banking Committee Thursday. “It’s become weaker and weaker and weaker.”
He then said the U.S. economy is “in a very good place” and that the Fed wants “to use our tools to keep it there.”
Data from the Labor Department that showed an increase in inflation and lower-than-expected initial jobless claims failed to lift the dollar today. However, the data dampened financial market expectations of a more aggressive 50 basis point cut at the Fed's July 30-31 meeting.
The AUD/USD pair and the NZD/USD pair both traded 0.4% higher.
The USD/JPY pair fell 0.1% to 108.32.
The USD/CNY pair inched up 0.1% after U.S. President Donald Trump said he is not happy China did not buy more American farm products even after agreeing to do so in a meeting last month.
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