Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

Dollar Slide Continues as Powell Retains Dovish Tone

ForexFeb 25, 2021 08:00
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters.

By Peter Nurse - The dollar weakened in early European trading Thursday, falling to near three-year lows against a number of riskier currencies after Federal Reserve Chairman Jerome Powell stated the central bank’s easy policy stance was here to stay.

At 3:55 AM ET (0755 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was down 0.3% at 89.920.

EUR/USD rose 0.2% to 1.2193, near a one-month high, GBP/USD climbed 0.1% to 1.4153, after almost reaching 1.43 overnight for the first time since April 2018, and USD/JPY was up 0.2% at 106.08. 

The risk-sensitive AUD/USD rose 0.3% to 0.7992, a fresh three-year high, NZD/USD was up 0.2% at 0.7447, just off Wednesday’s high of 0.7455, while USD/CAD fell 0.1% to 1.2496, near the three-year low of 1.2493.

Fed boss Jerome Powell continued his semi-annual testimony to Congress on Wednesday, telling the House of Representatives Committee on Financial Services that the central bank won't change its extremely accommodative stance until the U.S. economy is clearly improving, particularly the labor market, and would thus look through any near-term spike in inflation. 

 “Our policy is accommodative because unemployment is high and the labor market is far from maximum employment," Powell said.

These remarks maintained the dovish tone he had used in his testimony before the Senate on Tuesday.

“The Fed’s reiteration of a looser for longer policy and the lack of signal of any reduction in bond purchases regardless of the improving economic outlook remains – from an FX perspective – a key point in favour of a generalised dollar decline,” said ING analysts, in a research note. 

Easy financial conditions, the promise of fiscal stimulus, with an additional $1.9 trillion making its way through Congress, and an accelerating Covid-19 vaccine rollout have resulted in growing confidence in a global economic recovery, to the detriment of the safe-haven dollar.

With Powell emphasising the importance of the labor market, eyes will focus later in the session on the weekly unemployment claims data. Analysts are expecting a slight improvement though still-elevated levels of both initial claims and continuing claims. 

The second print of the fourth quarter gross domestic product release is also due later Thursday, with analysts expecting a reading of 2.0%, which would be up slightly from the first print of 1.9%.


Dollar Slide Continues as Powell Retains Dovish Tone

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Ricardo ND
Rcd72 Feb 25, 2021 8:53
Saved. See Saved Items.
This comment has already been saved in your Saved Items
powel will add a finacial crisis to the covid one!
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Our Apps
© 2007-2022 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
  • Sign up for FREE and get:
  • Real-Time Alerts
  • Advanced Portfolio Features
  • Personalized Charts
  • Fully-Synced App
Continue with Google
Sign up with Email