Dollar falls as investors expect policy shift in Fed speech
The dollar fell near its lowest level this week on Thursday as investors turned to Fed Chairman Jerome Powell’s speech for hints that the central bank might change its policy framework to boost inflation.
Powell is scheduled to give a speech at the annual central bankers’ conference later in the day, which will be held virtually due to the coronavirus pandemic.
Investors are expecting the U.S. central bank to release a new policy framework to counter low inflation as early as next month.
The dollar index stood at 92.834. The euro traded at 1.1837 on the dollar, close to its highest level for the week. However, traders are expecting the single currency to break from its range ahead of Powell’s speech.
The dollar slid to 105.90 against the yen. The Japanese currency is in focus as markets await Prime Minister Shinzo Abe’s news conference amid growing speculation over his health.
The pound firmed at $1.3213 after gaining 0.9% so far this week. The Aussie traded at $0.7241, up 1.1% this week.
In offshore trade, the yuan stood at 6.8774 on the dollar, its strongest level since late January after U.S. and Chinese officials reaffirmed their commitment to a Phase 1 trade deal despite diplomatic tensions.