The dollar remained near five-week lows on Tuesday after comments from Federal Reserve Chair Jerome Powell suggested a likely rate cut in September. Meanwhile, cryptocurrencies rose as the odds of former President Donald Trump’s reelection increased.
Powell stated that three recent U.S. inflation readings provide "somewhat" more confidence that inflation is returning to the Fed's target sustainably. He emphasized that these readings, on average, are favorable.
Market expectations have now shifted, with the CME FedWatch tool showing a fully anticipated rate cut in September and 68 basis points of easing expected for the year.
The euro was slightly down at $1.0893, and sterling was at $1.2967. The dollar index stood at 104.3, close to its one-month low of 104.
"Powell's comments, though dovish, remained data-dependent," said Charu Chanana, head of currency strategy at Saxo, underscoring the need for additional growth and labor data.
The yen weakened after reaching a one-month high against the dollar, with traders wary of potential intervention by Japanese authorities. Tokyo's suspected market intervention followed last week’s U.S. inflation report, with the Bank of Japan likely making significant yen purchases.
Cryptocurrencies gained, with bitcoin nearing $65,000 and ether reaching $3,466, driven by heightened expectations of a Trump presidency after an assassination attempt. Trump’s pro-crypto stance has bolstered investor confidence despite regulatory challenges.
The Australian and New Zealand dollars also eased, moving away from recent highs amid changing market conditions.
Powell stated that three recent U.S. inflation readings provide "somewhat" more confidence that inflation is returning to the Fed's target sustainably. He emphasized that these readings, on average, are favorable.
Market expectations have now shifted, with the CME FedWatch tool showing a fully anticipated rate cut in September and 68 basis points of easing expected for the year.
The euro was slightly down at $1.0893, and sterling was at $1.2967. The dollar index stood at 104.3, close to its one-month low of 104.
"Powell's comments, though dovish, remained data-dependent," said Charu Chanana, head of currency strategy at Saxo, underscoring the need for additional growth and labor data.
The yen weakened after reaching a one-month high against the dollar, with traders wary of potential intervention by Japanese authorities. Tokyo's suspected market intervention followed last week’s U.S. inflation report, with the Bank of Japan likely making significant yen purchases.
Cryptocurrencies gained, with bitcoin nearing $65,000 and ether reaching $3,466, driven by heightened expectations of a Trump presidency after an assassination attempt. Trump’s pro-crypto stance has bolstered investor confidence despite regulatory challenges.
The Australian and New Zealand dollars also eased, moving away from recent highs amid changing market conditions.
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