Dollar holds steady as investors weigh comments from Fed's Powell
The U.S. dollar held steady against major peers on Tuesday as investors weighed commentary from Federal Reserve officials including Chair Jerome Powell, while the Swedish krona gained after the Riksbank delivered a hawkish 25-basis-point rate cut.
The dollar was down 0.11% at 0.791 against the Swiss franc
The euro was up slightly by 0.08% at $1.1812 while sterling was flat at $1.3517.
Powell said the central bank needed to continue balancing the competing risks of high inflation and a weakening job market in coming interest rate decisions, in remarks that stuck close to language last week when the central bank cut its benchmark rate by a quarter of a percentage point.
The Fed may be late in supporting the labor market and could need to speed the pace of rate cuts if demand conditions weaken and businesses begin to lay off workers, Fed Vice Chair for Supervision Michelle Bowman had said earlier on Tuesday.
Other Fed officials including St. Louis Federal Reserve President Alberto Musalem and Federal Reserve Governor Stephen Miran had delivered remarks on Monday.
The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, was little changed at 97.25.
The dollar has been stable following the Fed interest rate cut but the most interesting thing is the strength of gold in the current environment, said Vassili Serebriakov, FX strategist at UBS in New York.
Money markets are currently pricing in a near-90% chance of a rate cut in October, down slightly from 92% a day earlier, per CME's FedWatch tool. Congressional funding talks this week to avert a government shutdown on September 30 have added to market jitters.
The dollar was down 0.08% to 147.56 against the Japanese yen .
The Swedish krona gained 0.19% to 9.331 versus the dollar after the Riksbank delivered a hawkish 25-basis-point rate cut.
Meanwhile, markets showed a largely muted reaction to a mixed bag of business survey readings in Europe.
While the data showed that euro zone business activity grew at its fastest pace in 16 months in September, it also pointed to French economic activity contracting the same month at the sharpest rate since April.
The dollar was down 3.2% against Argentina's peso a day after U.S. Treasury Secretary Scott Bessent said all options were on the table for stabilising Argentina, including swap lines and direct currency purchases.
Source : Reuters.com
