Dollar falls to one-week low as Powell pushes back against 75 bp hike

By Karen Brettell

NEW YORK, May 4 (Reuters) - The dollar fell to a one-week low against a basket of currencies on Wednesday after Federal Reserve Chairman Jerome Powell played down the prospect of a 75 basis point rate hike, even as he said the U.S. central bank will act aggressively to stamp out inflation.

Powell said in a press conference following the Fed’s policy statement that the U.S. central bank is not actively considering a 75 basis point increase, but that additional 50 basis point jumps should be on the table for the next couple of meetings.

It came after the Fed raised its benchmark overnight interest rate by 50 basis points, the biggest increase in 22 years, in a widely expected decision.

“The market was pricing in essentially a 50/50 chance that you see a 75 basis point hike by July, between June and July, and so I think the most important takeaway here that I think the market was really fixated on, was whether or not a 75 basis point hike is on the table, and he (Powell) basically pushed back on that,” said Mazen Issa, senior fx strategist at TD Securities in New York.

The dollar index =USD dropped sharply after Powell’s comments, falling to a one-week low of 102.48, before retracing back to last be at 102.62, down 0.76% on the day.

The U.S. central bank also said that its $9 trillion balance sheet would be allowed to decline by $47.5 billion per month in June, July and August and the reduction would increase to as much as $95 billion per month in September.

Investors have been evaluating whether the rally that sent the dollar index it to its highest level in 20 years last week has much further room to run at least in the short-term, with much of the Fed’s expected hawkishness already priced into the market.

However, the Fed is expected to tighten policy more than peers. Europe, for example, is struggling from weaker growth and energy disruptions due to sanctions imposed on Russia after its invasion of Ukraine.

The euro EUR=EBS rose to $1.0606, up 0.82% on the day, and is up from $1.0470 on Thursday, which was the lowest since January 2017.

The U.S. dollar has also benefited from safe-haven flows as COVID-19 restrictions in China trigger concerns about global growth and new supply chain disruptions.

Beijing shut scores of metro stations and bus routes and extended COVID-19 curbs on many public venues on Wednesday, focusing efforts to avoid the fate of Shanghai, where millions have been under strict lockdown for more than a month.

The Aussie dollar outperformed for the second day, after the Reserve Bank of Australia on Tuesday raised its cash rate by a surprisingly large 25 basis points to 0.35%, the first hike in over a decade, and flagged more to come as it pulls down the curtain on its massive pandemic stimulus.

The Aussie AUD=D3 gained 2.03% to $0.7241.

U.S. data on Wednesday showed that private employers hired the fewest workers in two years in April amid persistent labor shortages and increasing costs, which are hitting small businesses the hardest.

This week's major U.S. economic release will be the government's jobs report for April released on Friday.


Currency bid prices at 3:38PM (1938 GMT) Description



U.S. Close Pct Change


High Bid

Low Bid




Dollar index






+103.6300 +102.4800 Euro/Dollar







+$1.0507 Dollar/Yen






+130.3700 +128.6200 Euro/Yen






+137.4200 +136.6200 Dollar/Swiss







+0.9725 Sterling/Dollar GBP=D3






+$1.2453 Dollar/Canadian CAD=D3






+1.2730 Aussie/Dollar







+$0.7089 Euro/Swiss







+1.0285 Euro/Sterling







+0.8404 NZ







+$0.6423 Dollar/Dollar








+9.2940 Euro/Norway







+9.8378 Dollar/Sweden







+9.7393 Euro/Sweden








World FX rates Link
WRAPUP 3-Fed hikes rates by half percentage point, starts
balance sheet reduction June 1

US STOCKS-Wall Street mixed following Fed's interest hike

Editing by Nick Zieminski, William Maclean

Avertissement : Les entités de XM Group proposent à notre plateforme de trading en ligne un service d'exécution uniquement, autorisant une personne à consulter et/ou à utiliser le contenu disponible sur ou via le site internet, qui n'a pas pour but de modifier ou d'élargir cette situation. De tels accès et utilisation sont toujours soumis aux : (i) Conditions générales ; (ii) Avertissements sur les risques et (iii) Avertissement complet. Un tel contenu n'est par conséquent fourni que pour information générale. En particulier, sachez que les contenus de notre plateforme de trading en ligne ne sont ni une sollicitation ni une offre de participation à toute transaction sur les marchés financiers. Le trading sur les marchés financiers implique un niveau significatif de risques pour votre capital.

Tout le matériel publié dans notre Centre de trading en ligne est destiné à des fins de formation / d'information uniquement et ne contient pas – et ne doit pas être considéré comme contenant – des conseils et recommandations en matière de finance, de fiscalité des investissements ou de trading, ou un enregistrement de nos prix de trading ou une offre, une sollicitation, une transaction à propos de tout instrument financier ou bien des promotions financières non sollicitées à votre égard.

Tout contenu tiers, de même que le contenu préparé par XM, tels que les opinions, actualités, études, analyses, prix, autres informations ou liens vers des sites tiers contenus sur ce site internet sont fournis "tels quels", comme commentaires généraux sur le marché et ne constituent pas des conseils en investissement. Dans la mesure où tout contenu est considéré comme de la recherche en investissement, vous devez noter et accepter que le contenu n'a pas été conçu ni préparé conformément aux exigences légales visant à promouvoir l'indépendance de la recherche en investissement et, en tant que tel, il serait considéré comme une communication marketing selon les lois et réglementations applicables. Veuillez vous assurer que vous avez lu et compris notre Avis sur la recherche en investissement non indépendante et notre avertissement sur les risques concernant les informations susdites, qui peuvent consultés ici.

Nous utilisons des cookies pour vous donner la meilleure expérience possible de notre site internet. En savoir plus ou modifier vos paramètres de cookies.

Avertissement sur les risques : votre capital est à risque. Les produits à effet de levier ne sont pas recommandés pour tous. Veuillez consulter notre Divulgation des risques