The U.S. dollar lost ground against its major counterparts on Thursday, weighed down by Fed Chair Jerome Powell’s comments signaling a slower pace of rate hikes from this month.
The Fed is widely expected to hike interest rate by 50 basis points when it meets on December 13-14.
In his speech at a Brookings Institution event on Wednesday, Powell said the time for moderating the pace of interest rate increases may come as soon as at the December meeting.
“Given our progress in tightening policy, the timing of that moderation is far less significant than the questions of how much further we will need to raise rates to control inflation, and the length of time it will be necessary to hold policy at a restrictive level,” he said.
In U.S. economic releases, a report from the Institute for Supply Management showed the Manufacturing PMI slipped to 49.0 in November from 50.2 in October, with a reading below 50 indicating a contraction.
Meanwhile, a separate report released by the Labor Department showed first-time claims for U.S. unemployment benefits pulled back by more than expected in the week ended November 26th, falling to 225,000, a decrease of 16,000 from the previous week’s revised level of 241,000.
A report from the Commerce Department showed personal income climbed by 0.7% in October after rising by 0.4%. Personal spending advanced by 0.8% in October after climbing by 0.6% in September.
A reading on inflation said to be preferred by the Fed showed core consumer prices, which exclude food and energy prices, edged up by 0.2% in October after climbing by 0.5% in September. Economists had expected prices to rise by 0.3%.
The annual rate of core consumer price growth also slowed to 5% in October from 5.2% in September, coming in line with estimates.
The dollar index fell to 104.66, losing more than 1.2%.
Against the Euro, the dollar weakened to 1.0525 from 1.0410.
The dollar is trading at 1.2246 against Pound Sterling, sliding from 1.2058.
Against the Japanese currency, the dollar dropped nearly 2%, fetching 135.35 yen a unit, compared with 138.05 yen on Wednesday.
The dollar is weak against the Aussie with the AUD/USD trading at 0.6811.
Against Swiss franc, the dollar slipped, fetching CHF 0.9368, as against CHF 0.9453 Wednesday evening.
The dollar is up slightly against the Loonie at C$1.3435.