Forex - Dollar Stabilizes after Wednesday Drop on Dovish Fed - Investing.com

Investing.com - The dollar steadied on Thursday following a drop in the previous session after dovish comments by Federal Reserve Chairman Jerome Powell, who said interest rates were now close to the “neutral” level.

The , which measures the greenback’s strength against a basket of six major currencies, edged up 0.12% to 96.78 by 04:18 AM GMT (09:18 AM GMT), after falling 0.62% on Wednesday.

In a speech on Wednesday, Powell said interest rates were at which they neither stimulate nor hinder economic growth. The comments came less than two months after he said rates were probably "a long way" from that point.

Investors viewed the comments as an indication that the Fed would slow its program of hiking interest rates.

Market watchers were looking ahead to the minutes of the Fed’s November meeting due to be released later Thursday, for fresh indications on the path of interest rates.

The Fed is widely expected to raise rates for a fourth time this year at its upcoming meeting in December and has indicated that it may raise rates three more times in 2019, but markets are pricing in just one rate hike next year.

Investors were also monitoring developments in the ahead of the upcoming G20 summit later this week where U.S. President Donald Trump and his Chinese counterpart Xi Jinping are scheduled to hold talks.

Trump said earlier this week that it was "highly unlikely" he would accept China's request to hold off a planned increase in tariffs due to take effect in January.

The dollar was weaker against the yen, with down 0.32% to 113.33.

The euro was little changed against the U.S. currency, with changing hands at 1.1371.

The pound was broadly lower, with falling 0.45% to 1.2767 and advancing 0.46% to 0.8903.

Sterling was pressured lower amid uncertainty over whether British Prime Minister Theresa May’s Brexit withdrawal deal due to take place on December 11.

The Bank of England warned Wednesday that a no-deal Brexit could plunge the UK economy into the since the Second World War.

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