{"id":105580,"date":"2021-01-27T05:07:38","date_gmt":"2021-01-27T05:07:38","guid":{"rendered":"https:\/\/fin2me.com\/?p=105580"},"modified":"2021-01-27T05:07:38","modified_gmt":"2021-01-27T05:07:38","slug":"dollar-on-back-foot-with-feds-powell-likely-to-sound-dovish-note","status":"publish","type":"post","link":"https:\/\/fin2me.com\/markets\/dollar-on-back-foot-with-feds-powell-likely-to-sound-dovish-note\/","title":{"rendered":"Dollar on back foot with Fed's Powell likely to sound dovish note"},"content":{"rendered":"
TOKYO (Reuters) – The dollar was stuck on the back foot against major peers on Wednesday as markets wait on comments from Federal Reserve Chair Jerome Powell, who is likely to renew a commitment to ultra-easy policy.<\/p> The greenback held declines against riskier currencies, with pandemic recovery hopes getting a boost as the International Monetary Fund upgraded its forecast for 2021 global growth.<\/p>\n Treasury yields, whose rise had supported the dollar at the start of this year, declined overnight amid caution about the eventual size of and potential delays to President Joe Biden\u2019s $1.9 trillion fiscal stimulus plan.<\/p>\n \u201cThe stronger the world economic outlook, the weaker the U.S. dollar,\u201d said Joseph Capurso, currency analyst at Commonwealth Bank of Australia in Sydney.<\/p>\n \u201cPowell is going to make clear that they don\u2019t see any near-term exit from their very easy policy stance, and that\u2019s going to pull the dollar down.\u201d<\/p>\n The Fed chair is due to speak at a news conference after the central bank\u2019s two-day policy meeting that ends Wednesday.<\/p>\n Earlier this month, he said in a web symposium with Princeton University that the U.S. economy is still far from the Fed\u2019s inflation and employment goals, and it is too early to discuss altering monthly bond purchases.<\/p>\n The dollar index ticked up 0.1% to 90.253 on Wednesday in Asia, following a 0.2% decline the previous session.<\/p>\n The gauge has been consolidating since bouncing off a nearly three-year low of 89.206 at the start of the month.<\/p>\n The British pound climbed to its highest since May 2018 at $1.3753 before trading slightly lower at $1.3724.<\/p>\n The Aussie dollar slipped 0.2% to 77.30 U.S. cents, paring Tuesday\u2019s 0.5% rally.<\/p>\n Traders are also keenly watching progress on the U.S. stimulus front after Senate Majority Leader Chuck Schumer said Democrats may try to pass much of the President\u2019s massive spending package with a majority vote, but it is not clear if they have the numbers to override Republican objections.<\/p>\n \u201cWe\u2019ve had a lot of speculation recently that the Biden stimulus package won\u2019t be negative for the dollar at all, in fact it will be a positive thing just on the basis that it should lead to U.S. economic outperformance,\u201d said Kyle Rodda, a markets analyst at IG Markets.<\/p>\n \u201cBut I think if you look at more of the trends in the market at the moment, and we go back to the business cycle, we\u2019re really only at the beginning of this uptick in the global recovery, and a necessary ingredient of that is a weaker dollar.\u201d<\/p>\n The greenback gained 0.1% to 103.72 yen following a similar-sized decline overnight.<\/p>\n The euro was mostly flat at $1.2153 after rising around 0.1% in the previous session.<\/p>\n