U.S. Dollar Slides As Fed Chief Supports Gradual Rate Hikes
The U.S. dollar drifted lower against its key counterparts in the early New York session on Friday, after Fed Chair Jerome Powell remarked that there are no risks of overheating economy and a gradual pace of rate hikes seems appropriate.
«There is good reason to expect that this strong performance will continue,» Powell said at the Kansas City Fed's annual policy symposium in Jackson Hole, Wyoming. «I believe that this gradual process of normalization remains appropriate.»
If the strong growth in income and jobs continues, further gradual increases in the target range for the federal funds rate will likely be appropriate, he said.
Data from the Commerce Department showed that U.S. durable goods orders slumped much more than expected in the month of July.
The Commerce Department said durable goods orders tumbled by 1.7 percent in July after climbing by 0.7 percent in June. Economists had expected durable goods orders to drop by 0.5 percent.
The currency has been trading in a negative territory against its major counterparts in the Asian session.
The greenback dropped to 111.13 against the yen, after having risen to more than a 2-week high of 111.49 seen at 12:00 am ET. The next possible support for the greenback is seen around the 110.00 area.
Data from the Bank of Japan showed that Japan's producer prices rose 1.1 percent on year in July.
That was unchanged from the June reading following a downward revision from 1.2 percent. It was also beneath forecasts for 1.2 percent.
The greenback weakened to a 2-day low of 0.9811 against the franc, reversing from a high of 0.9865 seen at 6:45 pm ET. On the downside, 0.97 is likely seen as the next support level for the greenback.
The greenback fell to 1.1640 against the euro, its weakest since August 2. This follows a high of 1.1535 touched at 6:15 pm ET. The greenback is poised to find support around the 1.18 level.
Data from Destatis showed that Germany's economy expanded at a faster pace as initially estimated on domestic demand in the second quarter.
The largest euro area economy grew 0.5 percent sequentially, following the 0.4 percent increase in the first quarter. The rate came in line with the estimate released on August 14. The greenback depreciated to 1.2881 against the pound, after rising to 1.2799 at 8:15 pm ET. The greenback is seen finding support around the 1.31 level.
Pulling away from a weekly high of 1.3103 seen at 10:00 pm ET, the greenback edged down to 1.3015 against the loonie. If the greenback falls further, it may find support around the 1.29 region.
Having advanced to an 8-day high of 0.7238 against the aussie at 10:00 pm ET, the greenback reversed direction and declined to 0.7345. On the downside, 0.75 is likely seen as the next support level for the greenback.
The greenback slid to 0.6693 against the kiwi, coming off from a 4-day high of 0.6620 hit at 6:00 pm ET. Next key support for the greenback is seen around the 0.68 level.