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Dollar holds advantage as Jerome Powell quashes negative rates, data in focus

Kamis, 14 Mei 2020 / 07:42 WIB
Dollar holds advantage as Jerome Powell quashes negative rates, data in focus
ILUSTRASI. Dollar held onto gains against major currencies on Thursday (14/5)

Sumber: Reuters | Editor: Anna Suci Perwitasari

KONTAN.CO.ID - TOKYO. The dollar held onto gains against major currencies on Thursday after U.S. Federal Reserve Chairman Jerome Powell dismissed speculation that policymakers will adopt negative interest rates.

The Australian dollar was under pressure before closely-watched data on the jobs market, which may help determine how much more monetary and fiscal easing is necessary to support the economy.

The focus will shift to economic data from the United States and Europe in the next two days for more clues on the depth of the downturns there, while investors will closely watch China activity gauges for signs on how long it may take to emerge from the sharp shock caused by the coronavirus outbreak.

"The dollar managed to bounce back after Powell's comments on negative rates, but now the dollar's bias is fairly neutral," said Takuya Kanda, general manager of the research department at Gaitame.com Research Institute in Tokyo.

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"There could be some safe-have flows into the dollar, but everyone is facing the same economic problems caused by the coronavirus."

The dollar traded at US$ 1.0818 against the euro on Thursday following a 0.3% gain in the previous session. Against the pound, the greenback was quoted at US$ 1.2238, close to a five-week high.

The dollar bought 0.9722 Swiss franc after gaining 0.3% on Wednesday. The greenback was little changed at 106.91 yen.

Powell became the latest in a parade of policymakers to brush off the notion that they might push rates into negative territory, after Fed futures began pricing a small chance of sub-zero U.S. rates within the next year.

"The committee's view on negative rates really has not changed. This is not something that we are looking at," Powell said on Wednesday, referring to the Fed's policy-setting Federal Open Market Committee.