U.S. Dollar Extends Fall On U.S. Fed Chair Powell's Dovish Outlook

(RTTNews) - The U.S. dollar extended its early weakness against other major currencies in the Asian session on Monday, as traders react to U.S. after Fed Chair Jerome Powell's speech that signaled the central bank is prepared to begin cutting interest rates at its next monetary policy meeting in September.

"The time has come for policy to adjust," Powell said at the Jackson Hole Economic Symposium, although he noted the "timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks."

Powell said inflation is now much closer to the Fed's objective, with consumer prices rising 2.5 percent year-over-year in July, and noted progress toward 2 percent has resumed after a pause earlier this year.

In the Asian trading today, the U.S. dollar fell to more than a 1-year low of 1.1202 against the euro, from Friday's closing value of 1.1190. The greenback may test support near the 1.13 region.

The U.S. dollar started trading lower against the euro and the pound since August 8, 2024. Against the yen and the Swiss franc, the greenback started trading lower sing August 16th, 2024.

Against the yen and the Swiss franc, the greenback dropped to 3-week lows of 143.45 and 0.8457 from last week's closing quotes of 144.37 and 0.8479, respectively. If the greenback extends its downtrend, it is likely to find support around 141.00 against the yen and 0.83 against the franc.

The greenback edged down to 1.3223 against the pound, from Friday's closing value of 1.3209. On the downside, GBP/USD pair may find its support near the 1.33 area.

Against Australia, the New Zealand and the Canadian dollars, the greenback edged down to 0.6797, 0.6233 and 1.3499 from recent highs of 0.6773, 0.6213 and 1.3514, respectively. The next possible support levels for the greenback is found around 0.69 against the aussie, 0.64 against the kiwi and 1.33 against the loonie.

Looking ahead, German Ifo business climate index for August is due to be released at 4:00 am ET in the European session.

In the New York session, U.S. durable goods orders for July, Canada wholesales sales data for July and U.S. Dallas Fed manufacturing index for August are slated for release.