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U.S. Dollar Weaker Today After Powell Statement

The dollar is weaker today after Fed Chairman Jerome Powell indicated yesterday that the Federal Reserve is likely to slow asset purchases.

The dollar index against a basket of six other currencies was down 0.1% at 95.970.
EUR/USD was up 0.1% to 1.1337.
USD/JPY was up 0.2% to 113.37.
GBP/USD was up 0.2% to 1.3316.
AUD/USD increased 0.4% to 0.7151.

On Tuesday, the Fed Chairman had stated the following in front of the Senate Banking Committee:

“At this point, the economy is very strong and inflation pressures are increasing. Our concluding consideration of the asset purchase is reasonable. Maybe a couple of months ago.”

This includes the possibility that the Fed could reduce its bond purchases by $15 billion per month. The speed-up could lead to a point from which the central bank feels safe to raise the key interest rate.

USD/CNY rose 0.1% to 6.3661 in Asia as the RMB gained after a better-than-expected November manufacturing PMI.
Similarly, the Korean won hit a two-week high after trade data beat expectations.
USD/TRY fell 0.1% to 13.4557 after the lira fell to a record low on Tuesday.

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