# Dollar dips ahead of Powell speech
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-08-26
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Dollar dips ahead of Powell's speech amid inflation fears
Meta Description: Stay updated on the latest in forex trading as traders await clues from Powell's speech on the Fed's inflation-fighting plans at Jackson Hole
URL: https://financedigest.com/dollar-dips-ahead-of-powell-speechhtml

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By Iain Withers

LONDON (Reuters) – The dollar dipped against other major currencies on Friday, ahead of U.S. Federal Reserve Chair Jerome [Powell’s widely-anticipated speech](https://www.financedigest.com/stocks-dollar-pause-ahead-of-powell-biden-speeches.html "Stocks, dollar pause ahead of Powell, Biden speeches") at the Jackson Hole symposium.

Traders are looking for clues on the U.S. central [bank’s tightening plans to combat rampant inflation](https://www.financedigest.com/be-really-really-careful-on-inflation-bank-of-englands-haskel.html "Be ‘really, really careful’ on inflation – Bank of England’s Haskel") when Powell speaks at 1400 GMT.

The dollar index – which tracks the greenback against six major currencies – has steadily gained over the past two [weeks and is just shy of the two-decade peak of 109.29 it hit](https://www.financedigest.com/sterling-hits-2-1-2-week-high-eyes-on-boe.html "Sterling hits 2 1/2 week high, eyes on BoE") in mid-July.

After making small gains earlier in the session, it slipped a quarter of a percent on the day to 108.210.

(Powell) is likely to [focus on the short-term challenges and endeavour to leave no doubt about the Fed’s](https://www.financedigest.com/fed-in-spotlight-with-us-focus-on-stability-first-republic.html "Fed in spotlight with US focus on stability, First Republic") determination in the fight against inflation,” Esther Reichelt, a forex analyst at Commerzbank, said in a note.

If he succeeds convincingly, he could support the dollar, at least in the [short term.”](https://www.financedigest.com/ifrs-15-moving-away-from-short-term-fixes-is-vital-for-effective-compliance.html "IFRS 15: Moving away from short-term fixes is vital for effective compliance")

[Fed officials have been noncommittal about the potential size of interest rate](https://www.financedigest.com/wage-data-dents-dollar-recovery-before-fed-rate-decision.html "Wage data dents dollar recovery before Fed rate decision") increases in their addresses at the symposium so far, but have maintained that they will drive rates up to keep inflation at bay.

The Fed is due to get two more key [inflation reports and more jobs data](https://www.financedigest.com/dollar-dips-ahead-of-inflation-data-later-this-week.html "Dollar dips ahead of inflation data later this week") before its scheduled Sept. 20-21 meeting.

In Europe, soaring energy prices stemming from Russia’s invasion of Ukraine have dimmed economic prospects and weighed on the euro and sterling, [pushing them both more than 10% lower against the dollar](https://www.financedigest.com/powells-warning-on-higher-u-s-rates-pushes-dollar-to-3-mth-high.html "Powell’s warning on higher U.S. rates pushes dollar to 3-mth high") this year.

Sterling was flat on the day at $1.18410, after earlier losing as much as 0.5%, as British regulators confirmed consumer [energy bills would rise 80% and warned of a “crisis”](https://www.financedigest.com/europes-energy-crisis-and-the-nuclear-path-out.html "Europe’s energy crisis and the nuclear path out") needing urgent government action.

The euro gained 0.4% to $1.00120, nudging [back above parity against the dollar](https://www.financedigest.com/dollar-advances-as-strong-u-s-data-backs-higher-rates-backdrop.html "Dollar advances as strong U.S. data backs higher rates backdrop") after spending much of this week below the psychologically important level.

The [dollar gained 0.3% on the Japanese yen](https://www.financedigest.com/yen-sinks-as-rates-outlook-diverges-nz-dollar-tumbles.html "Yen sinks as rates outlook diverges; NZ dollar tumbles"), last quoted at 136.905 yen per dollar.

(Reporting by Iain Withers, Additional reporting by Alun John in [Hong Kong](https://www.financedigest.com/citadel-accelerates-hiring-push-in-hong-kong-and-london.html "Citadel accelerates hiring push in Hong Kong and London"), Editing by Rashmi Aich, Kirsten Donovan)


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