Dollar Dips as Fed Chair Hints at Rate Cut Amid Rising Global Market Volatility
The dollar fell broadly after Federal Reserve Chair Jerome Powell suggested a possible rate cut at the upcoming September meeting, though he did not promise any actions. His remarks resulted in increased market anticipation of easing monetary policy, with traders now expecting significant rate cuts by year-end.
The dollar experienced a broad decline on Friday following comments from Federal Reserve Chair Jerome Powell. He indicated the possibility of a rate cut at the central bank's September meeting but stopped short of confirming any specific action, impacting the dollar index significantly.
Market reactions were swift, with the euro and Japanese yen rising sharply against the dollar. Powell's address at the Fed's annual Jackson Hole conference highlighted potential risks in the labor market, spurring speculation about future monetary policy shifts.
The market is now pricing in high odds for a rate cut next month and expects additional cuts by year-end. This sentiment is amplified by political pressures from President Trump's recent comments regarding Fed Governor Lisa Cook, which have further fueled concerns about Federal Reserve independence.
(With inputs from agencies.)
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