US dollar advances after Powell’s speech

NEW YORK (Xinhua/ APP): The US dollar increased in late trading on Friday, after Federal Reserve Chair Jerome Powell signalled that the central bank may need to raise interest rates further to ensure inflation is contained.

The dollar index, which measures the greenback against six major peers, was up 0.09 percent to 104.0776 after Powell’s remarks. “Although inflation has moved down from its peak… it remains too high,” Powell said Friday at an annual economic symposium in Jackson Hole, Wyoming.

“We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective.” Experts have their own interpretations of Powell’s speech. In June, the Fed temporarily halted its battle against inflation due to concerns over the impact of banking stresses on lending.

There is a possibility that the central bank might opt to pause once more in September, as it awaits additional data amid uncertainties. “We think that the Fed is more likely to take a wait-and-see approach with the data and try to understand a little bit more about why the labor market is remaining so strong, despite the inflationary experience that we’ve had and the higher interest rates in the economy,” said Sinead Colton Grant, head of BNY Mellon investor solutions.