Dollar indicator fluctuates ahead of “Powell”
The dollar indicator has stopped its two-day decline as traders await hints on the outlook for US monetary policy that could emerge from Fed Chairman Jerome Powell’s speech.
Most of the G-10 coins remained low-volume transactions ahead of Powell’s digital speech at the Jackson Hole symposium.
The New Zealand dollar rose as foreign investors increased demand for local currency to buy New Zealand bonds, according to one trade.
The Australian dollar has gained momentum with exporters’ purchases.
“It is difficult for the dollar to see a sustainable rise or fall before Powell’s speech. If he points out that the Fed will announce average inflation targeting in September, the dollar could weaken,” said Takuya Kanda, managing director of the Gaitame.com Research Institute in Tokyo.
The Bloomberg Dollar Spot Index has not changed much after falling 0.4 percent in the past two days.
The Commonwealth Bank of Australia’s note stated that Powell could signal that inflation would be tolerated to exceed the 2 percent target in previous years to compensate for the missed target.
Powell’s announcement of a flexible inflation target means the dollar could fall, according to the bank. In addition, such a statement, according to the bank, shows that the US interest rates will remain low for a long time.
The New Zealand Dollar / US Dollar was up 0.1 percent, trading at the level of 0.6624.