Dollar gains against peers after Powell's cautious rate outlook
The U.S. dollar gained against peers including the yen, Swiss franc and euro on Wednesday, after Federal Reserve Chair Jerome Powell struck a cautious tone on further easing overnight.
The dollar strengthened 0.54% to 0.795 against the Swiss franc , on track to snap two consecutive sessions of losses.
The euro was lower against the dollar after German business morale fell unexpectedly in September. It was last down 0.69% at $1.1734 after rising for the last two sessions. Sterling declined 0.58% to $1.3443. It was steady against the euro , at 87.27 pence.
Powell maintained a cautious tone on Tuesday, saying the Fed needed to continue balancing the competing risks of high inflation and a weakening job market in coming rate decisions.
Markets are expecting quarter-point rate cuts at the remaining two Fed meetings this year and another in the first quarter of 2026, in line with the central bank's guidance after last week's meeting.
This week's U.S. data will be in focus, particularly Friday's release of the personal consumption expenditures price index, a key input for shaping expectations on the Fed's next policy steps.
The U.S. dollar index , which measures the currency against six major rivals, added 0.65% at 97.87, attempting to claw back ground after two straight losing sessions.
Candidates for the next leader of Japan's ruling Liberal Democratic Party answered journalists' questions on Wednesday. Frontrunner Sanae Takaichi, a fiscal and monetary dove, said monetary policy was up to the Bank of Japan but higher rates could affect mortgages and corporate investment.
Against the yen, the dollar added 0.83% to 148.85 yen , hitting its highest in three weeks and set to snap three straight sessions of losses.
New Zealand's dollar traded down 0.79% at $0.581 after Swedish central banker Anna Breman was named as the next Reserve Bank governor, becoming the first woman in the role.
The Australian dollar weakened 0.29% versus the greenback to $0.658. Data showed that inflation climbed more than expected to 3% in August, less than a week before the Reserve Bank's next policy meeting.
Source : Reuters.com
