NEW YORK: The dollar fell from one-month highs on Tuesday after US Federal Reserve Chair Jerome Powell doubled down on statements last week that disinflation has started, as he expects significant declines in inflation this year.
The greenback dropped across the board, led by losses versus the yen, Swiss franc, as well as the Australian and New Zealand dollar.
The Fed chief did say that the return to the US central bank’s inflation goal would be a bumpy process, which would need further rate increases.
“Powell reiterated that he sees declines in inflation coming and that means he may be able to be less hawkish in terms of tightening policy,” said Shawn Cruz, head trading strategist at TD Ameritrade in Chicago.
The dollar index, which measures the performance of the greenback against a basket of six other currencies, fell to session lows after Powell’s remarks. It was last down 0.2% at 103.34.
The euro was little changed at $1.0725 after falling to a five-week low of $1.0670.
The dollar dropped 1.2% versus then yen to 131 yen.
Sterling was up slightly against the dollar $1.2031 after tumbling to a one-month low of $1.1974 in the previous session.
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