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U.S. Dollar Rises Slightly After Powell Comments

6/5/2019, 11:59:49 AMMarket Analysis
U.S. Dollar Rises Slightly After Powell Comments

The U.S. dollar rose slightly on Tuesday after Federal Reserve Chair Jerome Powell said the central bank would act “as appropriate” in light of slow economic growth and trade tensions.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, gained 0.1% to 97.127 by 10:24 AM ET (14:24 GMT).

Powell said the Fed is closely watching the trade dispute between the U.S. and China that have disrupted global markets.

"We don't know how or when these issues will be resolved," Powell said. "As always, we will act as appropriate to sustain the expansion, with a strong labor market and inflation near our symmetric 2% objective."

Traders have been watching closely for signs the Fed could ease up on its monetary policy in light of inflation. St. Louis Federal Reserve President James Bullard said on Monday that an interest rate cut could be warranted in light of recent circumstances. While Bullard is a more dovish Fed member, his comments helped ease investor concern over the U.S.-China trade dispute.

The dollar was higher against the safe haven Japanese yen, with USD/JPY rising 0.1% to 108.15.

Elsewhere, the euro inched up, with EUR/USD up 0.1% to 1.1245.

Sterling gained as U.S. President Donald Trump said he was committed to a trade deal with the U.K. after it leaves the European Union. Trump is in the U.K. on a state visit. GBP/USD rose 0.3% to 1.2692.