The king of the U.S. dollar is back in support after Federal Reserve (Fed) Chairman Jerome Powell said the U.S. central bank was on track to begin reducing bond purchases.
Speaking at an online conference hosted by the Central Bank of South Africa on Friday, Powell also added that if the economy grows as the Fed expects, the implementation of these cuts will be completed by half of 2022.
Even so, he stressed that once the reduction in bond purchases ends, it does not mean the central bank will continue to raise interest rates after that.
In addition, Powell also commented on inflation, which is expected to continue to rise higher until next year. Still, the Fed still predicts it will come down to its target at 2%.
In fact, he also said that if inflation is seen to continue, the Fed will use their monetary tools to stabilize it.
Following that, the greenback dollar erased part of its losses on Friday, but it remained closed in the red with a 0.16%decline.
In the Asian session, the dollar index, which measures the strength of the greenback against a basket of major currencies, traded steady at 93.63.
Meanwhile, the US stock index declined following Powell's statement that inflation would rise higher and longer. The S&P 500 ended 0.11%loss, while the NASDAQ lost 0.82%.
