USD dips on FED Chair's Dovish Comments, Growth is Uncertain
The greenback, on Feb 23, slid following comments from the U.S. FED Chair's comments that economic recovery is uneven and far from complete against investor's expectations. On his first day of testimony before Congress, Jerome said the pace of economic growth is dependent on the effects of the coronavirus and the implementation of mitigation measures. Consequently, the central bank is ready to use all tools at its disposal to attain full employment and the inflation target of two percent.
In the immediate term, economic data suggests weakness in the U.S., twisting the hands of the central banks who are, as per Jerome's statement, ready to use all tools to stimulate employment in a reflation. The central banker said it would take more time before substantial progress is registered, therefore forcing the USD lower.
Impact on the USD:
Bearish. The greenback continues to swing from bullish to bearish. A lot depends on the economy, and the USD's performance depends on whether the U.S. could recover strongly after a depressed 2021. If its economy is far from achieving its inflation target and the labor market is weaker than expected, the USD could reverse gains and slide even lower in weeks ahead.
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