Dollar Decline: Federal Reserve Suggests Possible Rate Cuts

The dollar fell on Wednesday after the Federal Reserve hinted at possible rate cuts as early as September. Fed Chair Jerome Powell emphasized the bank's data-dependent approach. Meanwhile, the Japanese yen surged following a significant rate increase, and other currencies reacted to various economic reports.

The dollar continued its decline on Wednesday after the Federal Reserve indicated that it might lower interest rates as early as September.

Fed Chair Jerome Powell emphasized that future decisions would be dependent on forthcoming economic data. He acknowledged that an interest rate cut could be in play if inflation aligns with expectations, growth remains robust, and the labor market stays stable.

Meanwhile, the Japanese yen hit a four-month high against the dollar following an unexpected rate hike by the Bank of Japan. The yen's rally was further supported by interventions from Japanese authorities, aiming to bolster the currency.

(With inputs from agencies.)