Market News
US dollar inches lower as dovish Powell comments offset upbeat jobs data - REUTERS
- Fed's Powell says significant progress made on inflation
- US job openings rise in May -JOLTS report
- ECB's Lagarde says euro zone is advanced on disinflation path
NEW YORK, July 2 (Reuters) - The dollar slipped on Tuesday in thin, choppy trading after Federal Reserve Chair Jerome Powell struck a moderately dovish tone in his comments, suggesting that the U.S. central bank is more than likely to start its easing cycle later this year.
Powell, in a monetary policy conference in Portugal, said the U.S. economy has made significant progress on inflation as it gets back on the disinflationary path. His remarks were viewed as dovish, analysts said.
Comments by the Fed's top official outweighed data showing U.S. job openings increased in May after posting outsized declines in the prior two months. Job openings, a measure of labor demand, rose 221,000 to 8.140 million on the last day of May, according to the Job Openings and Labor Turnover Survey or JOLTS report.
Economists polled by Reuters had forecast 7.910 million job openings in May. Data for April was revised lower to show 7.919 million unfilled positions instead of the previously reported 8.059 million.
"Powell didn't really say anything new, but I would say he was slightly dovish," said Erik Bregar, director, FX & precious metals risk management at Silver Gold Bull in Toronto, adding that his remarks helped the dollar push a little lower.
"But I would argue that the JOLTS report is not as strong as it looks on the surface. The April number was revised down and so the market is trying to shake off the JOLTS report. That's why the dollar is not as high as it was initially after the release."
Following the JOLTS report and Powell's comments, U.S. rate futures have priced in a 69% chance of a rate cut in September, up from about 63% on Monday, according to LSEG calculations. The market has also priced in one to two rate cuts in 2024. In afternoon trading, the dollar index , which measures the U.S. unit against six other currencies, was down 0.1% at 105.71.
BOOST FROM TREASURY YIELDS
The dollar has been recently supported overall by the persistent rise in Treasury yields.
