Dollar Gains Amid Fed's Cautious Tone and Mixed Global Currency Movements

The U.S. dollar steadied near a three-week low as Federal Reserve Chair Jerome Powell's cautious remarks affected market sentiment. A potential rate cut by the Fed is uncertain, while the New Zealand dollar weakened due to expected rate cuts. The euro steadied amid political concerns in France, and the yen maintained a tight range ahead of the Bank of Japan's forecast update.

The U.S. dollar steadied on Wednesday, hovering near a three-week low as Federal Reserve Chair Jerome Powell's cautious tone kept market sentiment in check. Powell's statement that a rate cut is not imminent until inflation moves closer to a 2% target set the stage for Thursday's CPI report.

Powell also highlighted a cooling job market. 'We now face two-sided risks' and can no longer focus solely on inflation, he said. The dollar index, which measures the U.S. currency against six major peers, including the euro and yen, remained stable at 105.09, after a slight rise on Tuesday. This followed a dip to its lowest point since June 13 due to unexpectedly weak U.S. payroll data.

Meanwhile, the New Zealand dollar weakened by 0.51% to $0.60940 after the Reserve Bank of New Zealand indicated potential rate cuts. The Australian dollar surged against the kiwi, and the euro remained stable, despite political uncertainties in France. The yen traded within a tight range, awaiting the Bank of Japan's upcoming forecast update.

(With inputs from agencies.)