Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Dollar slips as Powell boost fades

Economy Mar 22, 2022 03:38PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: A U.S. hundred dollar bill and Japanese 10,000 yen notes are seen in this photo illustration in Tokyo, February 28, 2013. REUTERS/Shohei Miyano/File Photo 2/2

By Chuck Mikolajczak

NEW YORK (Reuters) - The dollar edged lower on Tuesday as a boost from comments by U.S. Federal Reserve Chair Jerome Powell that boosted the greenback on the previous day faded and a rise in equities markets help boost risk-on sentiment.

The greenback saw its biggest one-day percentage gain since March 10 on Monday, as Powell opened the door for raising interest rates by more than 25 basis points at upcoming policy meetings in order to combat inflation.

On Tuesday, St. Louis Fed President James Bullard repeated his call for the Fed to move aggressively on Bloomberg TV. San Francisco Fed President Mary Daly said she believes the main risk to the economy is a worsening of already high inflation as oil prices climb due to the conflict in Ukraine and a disruption in supply chains from China's COVID-19 countermeasures.

Traders are pricing in a 61.6% chance of a 50-basis-point hike at the Fed's May meeting, according to CME's FedWatch Tool, up from slightly more than 50% a week ago.

In the wake of Powell's comments, Goldman Sachs (NYSE:GS) now anticipates the central bank will raise interest rates by 50 basis points at both its May and June meetings.

Investors were in a risk-on mood, as U.S. stocks rose and dented some of the safe-haven appeal of the greenback, with equities getting a lift, in part, from bank shares on Fed rate hike expectations.

"For the dollar, it is well supported by the Fed's increasingly hawkish rate stance but it is off its peaks, risk-appetite has something to do with that, with stocks higher that is kind of tempering the dollar’s gains," said Joe Manimbo, senior market analyst at Western Union (NYSE:WU) Business Solutions in Washington.

"At least for now, it seems the market is giving the Fed the benefit of the doubt that it can foster a soft landing and that is what is underpinning risk appetite and capping gains in the dollar."

The dollar index fell 0.06%.

The yen continued its recent weakness as the Bank of Japan renewed its stance on keeping its ultra-loose monetary policy intact.

The yen hit a fresh six-year low of 121.03 and last weakened 1.05% versus the greenback at 120.72 per dollar.

The yen also suffered against other currencies, with the euro hitting a five-month high of 133.33 and was last up 1.2% to $133.17. The Japanese currency slumped to a more than 6-1/2-year low against the Swiss franc at 128.91, with the franc last up 1.48% to $128.89.

The euro was up 0.13% to $1.1028. The single currency has weakened over the past month as the conflict in Ukraine has escalated, leading to an increase in energy prices. On Monday, European Central Bank President Christine Lagarde said the Fed and ECB will move out of sync, as the war in Ukraine has very different impacts on their respective economies.

But ECB policymaker Francois Villeroy de Galhau said on Tuesday the central bank needs to look beyond short-term swings in energy prices and focus on underlying inflation trends.

Sterling was last trading at $1.326, up 0.72% on the day.

In cryptocurrencies, Bitcoin last rose 3.67% to $42,662.37.

Ethereum last rose 3.59% to $3,014.26.

Dollar slips as Powell boost fades
 

Related Articles

Improved risk sentiment lifts euro, sterling
Improved risk sentiment lifts euro, sterling By Reuters - Jul 04, 2022 1

By Joice Alves LONDON (Reuters) - The euro and sterling rose on Monday against safe-haven currencies, supported by improved global risk sentiment in a quiet trading session due to...

Dollar Down, Growth Fears Continue to Spread
Dollar Down, Growth Fears Continue to Spread By Investing.com - Jul 04, 2022

By Zhang Mengying Investing.com – The dollar was down on Monday morning in Asia, but moves were small as growth fears continued to stalk markets. The U.S. Dollar Index that tracks...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
JAMES CUNHA
JAMES CUNHA Mar 22, 2022 6:29PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Wait until China begins to assert itself as an economic superpower. Our markets will begin to appear like the Hang Seng.
Tre Hsi
Tre Hsi Mar 22, 2022 5:39AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
"The dollar rose on Tuesday as Federal Reserve Chair Jerome Powell put the possibility of 50 basis point rate hikes on the table..."  -- was not the possibility of .5% rate hike already on the table since last week's Fed meeting?
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email