© Reuters. A US dollar bill
By Hideyuki Sano
TOKYO (Reuters) – The dollar swelled near the lows of the week on Thursday as investors looked for tips from Federal Reserve President Jerome Powell that the central bank could possibly refine its policy framework to help boost inflation.
Powell is scheduled to hold the Fed’s annual central bank conference later in the day, which is usually held in Jackson Hole, Wyoming, but is being held practically this year due to the ongoing COVID-19 pandemic.
Investors are betting that the US Federal Reserve will introduce a new policy framework to combat sustained low inflation as early as next month.
“If the Fed turns out to be less informal than many have thought, we could see a demonstration in the dollar,” said Kyosuke Suzuki, director of forex at Societe Generale (OTC 🙂 in Tokyo.
The dollar’s index against six major currencies () stood at 92834, near the lowest level so far this week.
The euro changed hands to $ 1.1837 (), close to its highest level so far this week, although few market participants expect a clear break from its range so far this week ahead of Powell’s speech.
The dollar slipped to 105.90
A key focus for the yen is Prime Minister Shinzo Obe’s news conference scheduled for Friday amid growing speculation about his health.
The yen is likely to win if Abe decides to resign, given that aggressive monetary easing with close cooperation between the government and the central bank, called Abenomics, has been one of his trademark policies, traders said.
The British pound stood at $ 1.3213
It was at its strong level since January, after US and Chinese officials reaffirmed their commitment to a Phase 1 trade deal earlier this week despite tense bilateral relations.
It stood at 6.8774 per. Dollar
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