Dollar doldrums deepen on dovish Fed tone before Jackson Hole
dollar traded near the lowest in more than a year against the euro and sterling on Thursday as a dovish Federal Reserve and fresh signs of weakness in the U.S. job market backed the case for interest rate cuts.
The dollar sagged below the closely watched 145 yen mark as U.S. Treasury yields slid, ahead of weekly jobless claims data later in the day and a hotly anticipated speech by Fed Chair Jerome Powell at the central bank's annual Jackson Hole symposium on Friday.
The dollar index, which measures the currency against the euro, sterling, yen and three other major peers, was little changed at 101.14 as of 0015 GMT. It dipped to 100.92 overnight for the first time this year.
The euro was flat at $1.1154 after pushing as high as $1.1130 on Wednesday for the first time since July of last year.
Sterling was steady at $1.3092 after climbing to $1.31195 in the previous session, also a level last seen in July of 2023.
Fed officials last month were strongly leaning toward an interest rate cut at their September policy meeting and several of them would have even been willing to reduce borrowing costs immediately, according to the minutes of the July 30-31 gathering released on Wednesday.
Meanwhile, employers added far fewer jobs than originally reported in the year through March, according to a Labor Department report released the same day.
Traders now price in a 38% probability of a 50 basis point (bp) cut at the Fed's Sept. 17-18 meeting — up from 33% a day earlier — and a 62% chance of a 25 bp reduction, according
