Dollar Holds Steady as Traders Eye Powell's Speech; Kiwi Tumbles
The U.S. dollar remained steady as traders focused on Federal Reserve Chair Powell's upcoming speech for monetary policy clues. The New Zealand dollar fell significantly following an interest rate cut by its central bank. Traders anticipate potential rate cuts in response to fluctuating inflation and employment data.
The U.S. dollar stayed stable on Wednesday as traders anticipated a speech by Federal Reserve Chair Jerome Powell at the Jackson Hole symposium later this week. The speech is expected to provide critical insights into the future monetary policy pathway. Meanwhile, the New Zealand dollar experienced a significant decline following a reduction in its cash rate.
The dollar index, reflecting the U.S. currency against six others, remained flat at 98.319, after achieving a one-week high earlier. Powell's Friday speech is under scrutiny as markets look for any rebuttal against the anticipated rate cuts at the Fed's upcoming meeting.
Traders assign an 85% probability to a quarter-point cut next month, adjusting to labor market shifts and inflation data. Despite some inflationary pressures easing, a higher-than-expected producer price increase complicates matters. Speculations are high on how Powell will tackle this delicate balance.
(With inputs from agencies.)
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