Business News Asia
The dollar index, which measures the dollar’s performance against six major currencies in a basket of currencies, slowed after hitting a 20-year high of 104.92 on Thursday. Yesterday, it rose 0.33% to 104.51.
The dollar rose 0.7% to 129.22 yen, while the euro gained 1.01% to 134.52 yen and recovered 0.3% to $1.041.
The dollar continues to be driven by expectations that the Federal Reserve (Fed) will raise interest rates at a faster pace to contain inflation.
Powell has the difficult task of staving off the highest inflation in 40 years without the U.S. economy falling further behind after a 1.4% decline in the first quarter of 2022.
Powell acknowledged, “He can’t make any guarantees that the U.S. economy will gradually slow or have a soft landing if the Fed raises rates to curb inflation.”
U.S. Treasury Secretary Janet Yellen expressed confidence that the Fed can contain inflation without triggering a recession. Factors that will keep the U.S. out of recession include the strong labor market and banking sector, as well as the state of household finances. In addition, interest rates will remain low.