New York (awp/afp) – The dollar fell on Wednesday against most major currencies, weakened by the measured tone of the President of the American Federal Reserve (Fed), Jerome Powell, during his press conference .
Around 8:50 p.m. GMT, the greenback lost 0.53% against the single currency, at 1.0722 dollars per euro. Earlier, it fell to $1.0733.
The Fed’s Monetary Policy Committee decided on Wednesday to keep its key rate unchanged in a range between 5.25% and 5.50%, in which it has been since July.
American central bankers noted that inflation remained “high”. “In recent months, there has been no progress (in prices) towards the Committee’s objective”, namely 2% per year, they stressed.
During the press conference which followed the announcement, “the press gave (Jerome) Powell every possible opportunity to send a signal of firmness”, according to Adam Button of ForexLive.
“But he went further than necessary to avoid paving the way for a rate hike,” the analyst continued. Completely ruled out since the end of the year, the hypothesis of a new turn of the screw had recently resurfaced, in the face of indicators showing stubborn inflation in the United States.
“Our next move is unlikely to be to raise rates,” the Fed chairman said. “Our current posture is to keep rates unchanged” in the short term, while waiting for inflation to eventually come back into line.
“The market was worried about a possible mention of a hike,” explained Adam Button. “And he breathed a sigh of relief when he (Jerome Powell) ruled out that scenario.”
For Sam Stovall, of CFRA, “the tone of the press conference suggests that one (or two) rate cuts are still possible in 2024, depending on what the macroeconomic indicators say.”
Operators now assign a probability of 41% to a scenario including two rate cuts this year, compared to 31% the day before.
In the medium term, despite Wednesday’s decline, the “greenback” – one of the nicknames of the United States currency – remains well positioned, recognizes Adam Button, because several central banks are starting to reduce their rates or are preparing to do so. .
If the Fed remains frozen for many months, “the (rate) differential will improve” in favor of the American central bank, and support the dollar, the analyst anticipates.
Cours de mercredi Cours de mardi 20H50 GMT 21H00 GMT EUR/USD 1,0722 1,0666 EUR/JPY 168,20 168,31 EUR/CHF 0,9807 0,9806 EUR/GBP 0,8552 0,8538 USD/JPY 153,20 157,80 USD/CHF 0,9147 0,9194 GBP/USD 1,2536 1,2492
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