The dollar eased on Wednesday after Federal Reserve Chair Jerome Powell failed to offer fresh signs of a hawkish pushback against a resilient labour market in the United States, leading investors to bet that interest rates may not rise much further.
"The markets and the central bank are all in a position now where they're just watching the data, so for now we're less sensitive to Fed officials and far more sensitive to data."
That sent the U.S. dollar index to a one-month high of 103.96 on Tuesday, as investors raised their expectations of how much further the Fed would need to keep raising interest rates. Futures pricing shows that markets are expecting the Fed funds rate to peak just above 5.1% by June.
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