⚡Crypto Alert : Altcoins are up 28% in just last month! Unlock gains and start trading now - Click Here

US Dollar Dips After Some Gains as Fed Shifts Strategy

The US dollar has dipped after regained some of its strength a day after the Jackson Hole symposium where the Fed chair announced new measures to boost employment and have more tolerance for higher levels of inflation. At the time of writing, the US dollar index DXY is trading around 92.74.

On Thursday, Powell stated that the Fed will aim for maintaining inflation at an average level of 2%, allowing for periods of low inflation to be managed by efforts to lift it above 2% temporarily. This marks a distinct shift in the US central bank’s approach, making it focus more on driving economic growth instead of controlling inflation.

While the US dollar initially fell against its major peers following the announcement, it turned around and gained after US Treasury yields surged to multi-month highs. The benchmark 10-year US Treasury yield rose to 0.77%, the highest level since mid-June.

Bond yields had been weakening since the FOMC meeting back in June over worsening economic outlook for the US. This sentiment also weighed on the dollar and had sent it weaker after it had initially rallied as a safe haven currency when the pandemic began in March.

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
ABOUT THE AUTHOR See More
Avatar
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
Related Articles
🔒 OPEN A TRADING ACCOUNT