Dollar Index (DXY) fell by 0.14%

The U.S. dollar hovered in the middle of a recent range against major peers as investors looked into announcements from Fed officials. Traders will also be closely observing the crucial consumer inflation results due next week.

At the same time, the Australian dollar went up after seeing gains in U.S. equity futures and Reserve Bank earnings. The New Zealand dollar also rose.

A move in the federal funds rate from 5.01% to 5.26% is a very reasonable view of what needs to be done this year to reduce the supply-demand imbalance.

The comments followed Chairman Jerome Powell’s interest rate outlook on Tuesday, when he reiterated that disinflation was progressing well.

The dollar index, fell 0.14% to 103.33, pulling away from a one-month high of 103.97, which was the peak of a rally on Tuesday after Friday’s stronger-than-expected jobs report. However, 103 provided a solid base all week.

The employment data raised expectations that the Fed would return to aggressive monetary policy. But, in his speech, Powell denied that.

Investors will watch CPI data on Tuesday for more information about the policy situation.

OCBC currency strategist said the pace of the dollar’s recovery showed tentative signs of moderation. However, Fed suggestions still somewhat supported the currency that rate hikes would continue.

The market price suggests that the Fed funds rate will reach more than 5.12% by July before falling to 4.82% by the end of the year.

Values that changed the dollar index

Following the fall of the dollar index, the euro rose 0.19% to $1.0732, off a one-month low of $1.068 hit on Tuesday. The common currency found support from dovish comments from two German European Central Bank officials on Wednesday.

Other currencies were all up against the dollar:

• Japanese yen was at $131.456
• Sterling was up 0.1% at $1.2088.
• Australian dollar was up 0.48% to $0.6957
• Kiwi was up 0.67% to $0.63486.