US dollar hits 7-month low ahead of Federal Reserve Chair Powell’s speech
Shafaq News/ The US dollar fell to its lowest level in seven months on Monday as investors awaited a speech by Federal Reserve Chair Jerome Powell at the Jackson Hole Economic Symposium.
Investors are anticipating that Powell, in his speech on Friday, will signal a potential interest rate cut of 25 or 50 basis points. The likelihood of a larger cut has diminished since last week's data revealed higher-than-expected inflation in the housing sector for July, alongside robust retail sales figures for the same month.
Attention will also be focused on whether Powell indicates the possibility of rate cuts at each future meeting. However, markets may be overestimating the extent and pace at which the central bank is likely to move.
"I think we are still at a point where a rate cut in September is justifiable," said Eugene Epstein, Head of Market Structuring for North America at Monicorpe in New Jersey.
The minutes from the Federal Reserve’s July meeting, set to be released on Wednesday, are also expected to provide new insights into the expected interest rate path.
The dollar index fell by 0.34% to 102.11, having earlier touched 102.00, its lowest level since January 5. The dollar also dropped 0.75% to 146.48 yen, after reaching 145.20 yen earlier, marking its lowest level since August 7.
