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Dollar Holds Steady After Recent Decline as Fed Officials Echo Policy Caution

3 weeks ago

The dollar found its footing after a decline on Tuesday, with a chorus of Federal Reserve officials echoing Chair Jerome Powell’s cautious stance on monetary policy, signaling that the central bank won’t rush into easing measures.

Fed Bank of Cleveland President Loretta Mester suggested that policymakers may find confidence to consider interest rate cuts “later this year,” provided the economy unfolds as anticipated. Meanwhile, Neel Kashkari, her counterpart from Minneapolis, acknowledged the significant progress made on inflation but emphasized the necessity for further advancements.

In New Zealand, government bond yields saw an uptick following a robust jobs report, fueling speculation that the central bank might exercise caution regarding interest rate cuts. This development led to slight gains in both the local currency and the Aussie dollar for the second consecutive day.

Elsewhere, oil prices traded within a narrow range after two consecutive days of gains, as geopolitical tensions in the Middle East were counterbalanced by reports indicating an expansion in US stockpiles.