The U.S. dollar is moderately declining against major world currencies in early trading on Wednesday as market participants are waiting for Federal Reserve Chairman Jerome Powell to speak.
The index, calculated by ICE and showing the U.S. dollar dynamics against six currencies (euro, Swiss franc, yen, Canadian dollar, pound sterling and the Swedish krona), is down 0.3%, while the broader WSJ Dollar Index is down 0.2%.
Powell will speak at 8:30 p.m. ksc Wednesday at the Hutchins Center on Fiscal and Monetary Policy with an outlook on the economy and labor market. The event also includes answers to questions from the audience. Traders will closely follow the Fed chief’s statements, hoping to get signals about the future trajectory of monetary policy.
Last meeting, the Fed raised the rate by 75 basis points (bps) for the fourth consecutive meeting, and the rate is now at its highest level since January 2008 at 3.75-4% per annum. The last meeting this year will be December 13-14, and the market is expecting a rate hike of a more moderate 50 bps.
Earlier Federal Reserve Bank of St. Louis Governor James Ballard noted that the U.S. central bank will have to keep its key interest rate above 5% throughout 2023 and part of 2024. He also said there is no big difference between raising the rate by 50bp or 75bp at a separate meeting, and he leaves such “tactical” details to the head of the Fed.
The euro/dollar pair is trading at $1.0356 by 7:47 kk against $1.0331 at the close of Tuesday’s session, with the euro gaining about 0.25%.
The dollar/yen exchange rate is down 0.15% at 138.51 yen from 138.71 yen at the end of last session.
The pound is up 0.3% and trades at $1.1987 versus $1.1951 the day before.
