Dollar on Back Foot, Powell Likely to Sound Dovish Note

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The greenback held declines against riskier currencies, with pandemic recovery hopes getting a boost as the International Monetary Fund upgraded its forecast for 2021 global growth.
The dollar index ticked up 0.1 to 90.253 on Wednesday in Asia, following a 0.2 decline the previous session.

The dollar was stuck on the back foot against major peers on Wednesday as markets wait on comments from Federal Reserve Chair Jerome Powell, who is likely to renew a commitment to ultraeasy policy.

The greenback held declines against riskier currencies, with pandemic recovery hopes getting a boost as the International Monetary Fund upgraded its forecast for 2021 global growth.

Treasury yields, whose rise had supported the dollar at the start of this year, declined overnight amid caution about the eventual size of and potential delays to President Joe Bidens 1.9 trillion fiscal stimulus plan.

The stronger the world economic outlook, the weaker the U.S. dollar, said Joseph Capurso, currency analyst at Commonwealth Bank of Australia in Sydney.

Powell is going to make clear that they dont see any nearterm exit from their very easy policy stance, and thats going to pull the dollar down.

The Fed chair is due to speak at a news conference after the central banks twoday policy meeting that ends Wednesday.

Earlier this month, he said in a web symposium with Princeton University that the U.S. economy is still far from the Feds inflation and employment goals, and it is too…

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