By Gina Lee
Investing.com – The dollar was down Friday morning in Asa, giving up some of its past gains as the rally from the US Federal Reserve’s new strategy to increase employment as well as tolerance for higher inflation picked up.
Speaking at the Jackson Hole symposium on Thursday, U.S. Federal Reserve Chairman Jerome Powell said the Fed would target average inflation of 2% and address years of super-low inflation.
Although the dollar fell against the yen and the euro immediately after Powell’s comments, it recovered losses as US government interest rates rose to their highest levels in several months.
That which tracks greenback against a basket of other currencies fell 0.20% down to 92,802 before 12:24 ET (5:24 GMT).
Some investors were optimistic that rising government interest rates would continue to boost the dollar.
Since the FOMC meeting in June, treasury yields have fallen and the dollar has fallen, but I do not think that will be the case at the moment, especially after the Fed’s speech. “The market is more likely to see higher government returns,” Masafumi Yamamoto, chief currency strategist at Mizuho Securities, told Reuters.
But other investors got a more cautious note.
“Obviously, we saw a ‘buy rumor, sell fact’ play out, especially in US government bonds, which have led to broad market movements,” said Pepperstone, research director Chris Weston
“The move higher in Treasury rates after Powell fostered a USD rally, though we find it flat during the day, with a mixed picture across the well-traded FX pairs.”
Meanwhile, the pair rose 0.26% to 106.83. Investors are now awaiting Japanese Prime Minister Shinzo Abe’s press conference, which is set to take place later in the day, where Abe is widely expected to address his state of health and whether he will remain in the post.
The pair rose 0.42% to 0.7288 and the pair rose 0.34% to 0.6660.
The pair was down 0.22% to 6.8770 and the pair rose 0.34% to 1.3243.
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