U.S. dollar declines amid Fed Chair Powell speech

Source: Xinhua| 2018-08-25 04:18:32|Editor: Mu Xuequan
Video PlayerClose

NEW YORK, Aug. 24 (Xinhua) -- The U.S. dollar index decreased against other major currencies in late trading on Friday, as Wall Street digested comments from U.S. Federal Reserve Chairman Jerome Powell.

Powell reiterated on Friday that the central bank will stick to the strategy of gradual rate hikes to manage potential risks and support domestic economic recovery.

Speaking at an annual economic symposium in Jackson Hole, Wyoming, Powell said the central bank faces two major risks: "moving too fast and needlessly shortening the expansion, versus moving too slowly and risking a destabilizing overheating."

"I see the current path of gradually raising interest rates as the FOMC's approach to taking seriously both of these risks," he said, referring to the Federal Open Market Committee (FOMC), the Fed's policy-making committee.

While U.S. inflation has recently moved up near 2 percent, Powell said he sees "no clear sign of an acceleration above 2 percent" and there does not seem to be "an elevated risk of overheating."

Some analysts said Powell's speech suggested the central bank may be approaching its neutral federal funds rate, which means the federal funds rate has reached an equilibrium where it neither stimulates nor suppresses economic growth.

On the economic front, U.S. new orders for manufactured durable goods in July decreased 4.3 billion U.S. dollars or 1.7 percent to 246.9 billion U.S. dollars, worse than market consensus, said the Commerce Department on Friday.

The dollar index, which measures the greenback against six major peers, fell 0.55 percent at 95.1468 in late trading.

In late New York trading, the euro was up to 1.1625 dollars from 1.1536 dollars in the previous session, and the British pound increased to 1.2847 dollars from 1.2814 U.S. dollars in the previous session. The Australian dollar climbed to 0.7324 dollar from 0.7245 dollar.

The U.S. dollar bought 111.20 Japanese yen, lower than 111.29 Japanese yen of the previous session. The U.S. dollar decreased to 0.9828 Swiss franc from 0.9862 Swiss franc, and it fell to 1.3028 Canadian dollars from 1.3093 Canadian dollars.