In a highly volatile trading session on Tuesday, US Dollar bounced back strongly late in the day after US Federal Reserve Chair Jerome Powell had told that the risks of an ongoing inflation-surge had mounted significantly, suggesting this could be the time to retire the term ‘transitory’ for inflation which in effect had acted as an impetus for the greenback, however, the American Dollar tumbled against most major currencies, but pared a lion’s share of its losses in late-afternoon US trading hours.
Aside from that, speaking in a hearing with the US Senate Banking Committee, Fed Chair Powell also was quoted saying that a lingering high-tide in inflation indicators would more likely to be related to pandemic outbreak, while Powell’s latest inflation outlook had signaled a likely acceleration in US Central Bank’s bond-taper program.
So far, a majority of Fed policymakers were expecting one of two rate-hikes next year starting from mid-2022.
Dollar regains momentum after Fed’s Powell signals time to hike interest rate
Citing statistics, in the day’s FX market wind-down, the bloc’s common currency euro jumped 0.46 per cent to $1.1343 against its American counterpart and safe-haven Japanese Yen added 0.44 per cent to 113.02 yen per Dollar.
Aside from that, another safe-haven asset Swiss Franc jumped 0.53 per cent to $0.9179, as Omicron worries had continued to keep the traders on their toes despite soothing remarks from the US President Joe Biden, the S. African doctors who are treating Omicron-infected patients alongside Chief of American pandemic vaccine manufacturer Merck & Co.
Besides, Australian Dollar fell 0.20 per cent to $0.7128 against its American counterpart and Canadian Dollar shed 0.27 per cent to $1.2774, as commodity markets continued to bear the heaviest brunt in an Omicron-led panic sell-off wave.
British Pound edged 0.06 per cent lower to $1.3305, while Dollar jumped 6.36 per cent to a record 13.53 Lira per Dollar against a besieged Turkish currency. US Dollar Index (DXY) measured against a basket of six major currencies on an average, shed 0.3 per cent to 95.79 after hitting as high as 96.62 shortly after the remarks from Fed Chair Jerome Powell.