Dollar rises for third day before Fed Chair Powell speech

The dollar’s rebound extended for a third day on Wednesday after some Federal Reserve policymakers left the door open to further rate hikes, as traders looked to a speech from Chair Jerome Powell on the central bank’s future policy path.

The greenback, which hit a seven-week low at the start of the week in the wake of the Fed’s decision to hold its policy rate steady and on data pointing to a cooling U.S. labour market, has found a floor as markets remain at odds over whether a peak in U.S. rates has been reached and how soon the Fed could begin easing policy.

Futures point to a roughly 16% chance of another hike by January, but are pricing in a 21% chance that rate cuts could come as early as March, according to the CME FedWatch tool.

The U.S. dollar index, which last week clocked its sharpest weekly fall in about four months, rose 0.2% to 105.75 and was on track for a weekly gain.

Source: CNBC