Dollar Hits Seven-Month Low Amid Market Speculations on Fed's Next Move

The dollar reached a seven-month low as traders anticipated Federal Reserve Chair Jerome Powell's upcoming comments which might provide insights into the U.S. monetary easing cycle. Meanwhile, Sweden's crown dropped following a central bank rate cut and potential policy easing. Markets are also focusing on the Jackson Hole conference and U.S. presidential elections.

The dollar plunged to a fresh seven-month low on Tuesday, with traders eagerly awaiting Federal Reserve Chair Jerome Powell's remarks on Friday. These comments are poised to offer vital clues on the pace of the U.S. monetary easing cycle, which could significantly impact market dynamics.

Meanwhile, Sweden's crown experienced volatility, dropping after the central bank slashed rates and hinted at possible accelerated policy easing if inflationary pressures do not intensify. Initially rising in the morning trade, the crown settled at 10.27 against the U.S. dollar after the Riksbank announcement.

The euro firmed to $1.1078, reaching its highest point since December, while the dollar index, measuring the greenback against six global peers, hit its lowest since early January. Market participants are also eyeing the Jackson Hole conference and Fed meeting minutes for further direction, with some analysts debating the extent of potential rate cuts by the Fed this year.

(With inputs from agencies.)