WASHINGTON (dpa-AFX) - The U.S. dollar had a spell in positive territory on Tuesday, but failed to hold gains after Federal Reserve Chairman Jerome Powell's comments hinted at the possibility of a rate cut.
In his opening remarks at a Chicago Fed conference today, Powell said the central bank will respond with appropriate actions to sustain the U.S. economic expansion.
The dollar index, which advanced to 97.34 earlier in the day, dropped down to 97.06 later on in the session, down by about 0.1% from previous close.
The dollar was down 0.11% against the euro, trading at 1.1255 a unit of the latter.
Against British Pound Sterling, the dollar was down 0.28% at 1.2700, with the sterling rising from a five-month low after U.S. President Donald Trump promised a post-Brexit deal with the U.K.
The Aussie gained about a quarter percent against the greenback after the Australian central bank cut interest rate by 25 basis points on Tuesday.
The greenback was down 0.33% against the loonie at 1.3393, and down 0.6% against Swiss franc at 0.9919.
The dollar was up 0.06% against the Japanese yen, with a unit of dollar fetching 108.14 yen.
Powell mentioned recent developments involving trade negotiations and other matters in his speech and acknowledged that the Fed does not know how or when these issues will be resolved.
'We are closely monitoring the implications of these developments for the U.S. economic outlook and, as always, we will act as appropriate to sustain the expansion, with a strong labor market and inflation near our symmetric 2 percent objective,' Powell said.
On Monday, St. Louis Fed President James Bullard suggested in a speech that an interest rate cut 'may be warranted soon' due in part to escalating global trade tensions.
The Fed is scheduled to hold its next monetary policy meeting on June 18th and 19th.
In economic news today, data released by the Commerce Department showed factory orders slumped by 0.8% in April after jumping by a downwardly revised 1.3% in March.
Economists had expected factory orders to drop by 0.9% compared to the 1.9% spike originally reported for the previous month.
Orders for durable goods led the pullback by factory orders, plunging by 2.1% in April after surging up by 1.7% in March. The steep drop came as orders for transportation equipment plummeted by 5.9%.
Meanwhile, the Commerce Department said orders for non-durable goods rose by 0.5% in April after climbing by 0.9% in March.
Copyright RTT News/dpa-AFX
© 2019 AFX News
