Breaking News
Ad-Free Version. Subscribe now to follow markets, faster and distraction-free. More details

FOREX-Dollar on back foot with Fed's Powell likely to sound dovish note

ForexJan 27, 2021 05:42
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters.

* Powell expected to reiterate it's too soon for taper talk
* Sterling touches highest since May 2018 amid dollar
* Graphic: World FX rates

By Kevin Buckland
TOKYO, Jan 27 (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. 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.
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's
$1.9 trillion fiscal stimulus plan. "The stronger the world economic outlook, the weaker the
U.S. dollar," said Joseph Capurso, currency analyst at
Commonwealth Bank of Australia in Sydney.
"Powell is going to make clear that they don't see any
near-term exit from their very easy policy stance, and that's
going to pull the dollar down."
The Fed chair is due to speak at a news conference after the
central bank's two-day policy meeting that ends Wednesday.
Earlier this month, he said in a web symposium with
Princeton University that the U.S. economy is still far from the
Fed's inflation and employment goals, and it is too early to
discuss altering monthly bond purchases. The dollar index =USD ticked up 0.1% to 90.253 on
Wednesday in Asia, following a 0.2% decline the previous
The gauge has been consolidating since bouncing off a nearly
three-year low of 89.206 at the start of the month.
The British pound GBP= climbed to its highest since May
2018 at $1.3753 before trading slightly lower at $1.3724.
The Aussie dollar AUD= slipped 0.2% to 77.30 U.S. cents,
paring Tuesday's 0.5% rally.
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's massive
spending package with a majority vote, but it is not clear if
they have the numbers to override Republican objections.
"We've had a lot of speculation recently that the Biden
stimulus package won't 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," said Kyle Rodda, a
markets analyst at IG Markets.
"But 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're
really only at the beginning of this uptick in the global
recovery, and a necessary ingredient of that is a weaker
The greenback gained 0.1% to 103.72 yen JPY=EBS following
a similar-sized decline overnight.
The euro EUR=EBS was mostly flat at $1.2153 after rising
around 0.1% in the previous session.

Currency bid prices at 1:26PM (426 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Euro/Dollar EUR=EBS $1.2156 $1.2160 -0.03% -0.51% +1.2170 +1.2154
Dollar/Yen JPY=D3 103.7070 103.6450 +0.09% +0.44% +103.7370 +103.6000
Euro/Yen EURJPY= 126.07 125.99 +0.06% -0.67% +126.1400 +126.0100
Dollar/Swiss CHF=EBS 0.8868 0.8869 +0.01% +0.25% +0.8870 +0.8864
Sterling/Dollar GBP=D3 1.3729 1.3735 -0.06% +0.48% +1.3750 +1.3724
Dollar/Canadian CAD=D3 1.2719 1.2695 +0.22% -0.09% +1.2723 +1.2688
Aussie/Dollar AUD=D3 0.7733 0.7748 -0.21% +0.51% +0.7762 +0.7730
NZ NZD=D3 0.7227 0.7239 -0.17% +0.64% +0.7243 +0.7225

All spots FX=
Tokyo spots AFX=
Europe spots EFX=
Volatilities FXVOL=
Tokyo Forex market info from BOJ TKYFX

World FX rates

FOREX-Dollar on back foot with Fed's Powell likely to sound dovish note

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.
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
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email