The dollar held near two-week lows on Monday, under pressure from the Federal Reserve chair’s message that there is no rush to undo massive stimulus.
- The lure of the US currency was damaged on Friday when Federal Reserve Chairman Jerome Powell said a reduction in the asset purchase program could begin this year, but the central bank would remain cautious.
- * Investors responded by dropping the dollar index, which compares the value of the currency to a basket of six prominent competitors. It reached a two-week low of 92.595 units before settling around 92.69, little changed on the day.
- * The euro was trading at $1.1800, stable on the day but near a three-week high in Asian trading at $1.1810.
- The yen rose to its highest level since last Wednesday at 109.70 units per dollar.
- * In general, operations in Europe have been curtailed due to a public holiday in the UK.
- “We avoided a stern surprise at Jackson Hole,” said Vasilius Gekionakis of Lombard Odier Group. “In the very short term, there could be more downward pressure on the dollar, but what really matters is the economic data later.”
- * In the month, the dollar index rose by about 0.7%.
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