The U.S. dollar firmed against some of its major counterparts on Monday as prospects of former president Donald Trump getting re-elected in the upcoming presidential election in November increased after an attempt on his life by a shooter on Saturday.
The dollar remained subdued for quite sometime today after comments from Fed Chair Jerome Powell that the central bank will not wait until inflation hits 2% to cut interest rates.
In U.S. economic news, a report released by the Federal Reserve Bank of New York showed regional manufacturing activity contracted at a slightly faster rate in the month of July.
The New York Fed said its general business conditions index edged down to a negative 6.6 in July from a negative 6.0 in June, with a negative reading indicating contraction. Economists had expected the index to come in unchanged.
Fed Chair Jerome Powell, who spoke at the Economic Club of Washington D.C. today, said that the central bank will not wait until inflation hits 2% to cut interest rates.
Powell referenced the idea that central bank policy works with \"long and variable lags\" to explain why the Fed wouldn\'t wait for its target to be hit.
\"The implication of that is that if you wait until inflation gets all the way down to 2%, you\'ve probably waited too long, because the tightening that you\'re doing, or the level of tightness that you have, is still having effects which will probably drive inflation below 2%,\" Powell said.
The dollar index, which dropped to 104.03 a little before noon, recovered to 104.26 later in the day, gaining about 0.16%.
Against the Euro, the dollar gained marginally to 1.0896. Against Pound Sterling, the dollar was little changed at 1.2968.
The dollar weakened against the Japanese currency, edging down to 158.06 yen a unit. Against the Aussie, the dollar strengthened to 0.6759.
The greenback firmed against Swiss franc, fetching CHF 0.8959 a unit, and strengthened against the Loonie, rising to C$ 1.3683.