U.S. dollar falls as Fed turns dovish

  • World
  • Wednesday, 29 Nov 2023

NEW YORK, Nov. 28 (Xinhua) -- The U.S. dollar dropped in late trading on Tuesday, as Federal Reserve Governor Christopher Waller indicated that more hikes may not be necessary.

The dollar index, which measures the greenback against six major peers, decreased 0.45 percent to 102.7465 in late trading.

The Consumer Confidence index in November, reported by The Conference Board on Tuesday, surpassed both previous expectations and the revised October figures. Simultaneously, Waller suggested the possibility of reducing rates if inflation remains on a downward trend for an extended period, which led to a decline of the U.S. Treasury yields and the U.S. dollar.

Fed Governor Michelle Bowman remained hawkish, saying that she thinks the Fed will have to raise rates further to bring inflation down to the 2 percent target in a timely way. However, Waller's change of tone seems to have weighed more on the market, as investors do not expect the Fed to vote for additional hikes.

In addition, Chicago Federal Reserve Bank President Austan Goolsbee said he believes overall inflation is coming down at a pace not seen since the 1950s. New York Fed President John Williams also found it encouraging that inflation is declining, saying that the Fed remains committed to getting inflation back to target.

In late New York trading, the euro was up to 1.0990 dollars from 1.0956 dollars in the previous session, after the surprise comments from European Central Bank (ECB) member Joachim Nagel who said that the ECB might consider unwinding its historic bond portfolio. The British pound increased to 1.2698 dollars from 1.2631 U.S. dollars in the previous session.

The U.S. dollar bought 147.4240 Japanese yen, lower than 148.6250 Japanese yen of the previous session. The U.S. dollar fell to 0.8777 Swiss francs from 0.8802 Swiss francs, and it was down to 1.3568 Canadian dollars from 1.3623 Canadian dollars. The U.S. dollar was down to 10.3320 Swedish kronor from 10.4226 Swedish kronor.

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