Dollar Higher, Powell’s Interview Limits Gains

The dollar was seen higher this morning as Joe Biden outlined his plans for additional stimulus, but gains were limited by Federal Reserve Chairman - Jerome Powell declining to join discussion about reducing monetary stimulus. 

Biden released details of his $1.9 trillion spending plan, including more direct payments to households, an expansion of jobless benefits and an enlargement of vaccinations and virus-testing programs. Gains are, however, limited as Fed Chair Jerome Powell adopted a dovish tone in a live-streamed interview on Thursday.

To be fair, Powell didn't explicitly rule out a tapering of bond purchases toward year-end, but his timid approach couldn’t have not had an impact. Additionally, the Fed doesn't expect to raise interest rates until 2023 at the earliest. Both - low interest rates and the asset-buying program have been laying heavily on the USD for a while now.

By 08.00 GMT, the Dollar Index, which tracks the greenback against a basket of six other currencies, was up 0.1% to 90.267, rebounding from last week’s near three-year low.

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