Dollar under Pressure: Fed Remarks Weigh on US Currency

The US dollar came under pressure in early Asian trading hours as traders tried to interpret comments from Federal Reserve members regarding possible changes to the interest rate path. The greenback continued to decline after ending a three-day winning streak on Monday. The US Dollar Index was last noted at 97.28. Ongoing uncertainties caused by potentially forthcoming economic policy decisions by the US government under President Donald Trump heightened investor nervousness, especially ahead of the release of consumer spending data and ongoing talks to avoid a government shutdown as of September 30. Traders lowered their expectations for rate cuts at the October meeting of the Federal Open Market Committee, with the probability of a rate pause standing at 10.2%, up from 8.1% on Friday, according to CME Group's FedWatch Tool. Against the yen, the dollar remained steady at 147.74 yen in a tight trading range since August. The New Zealand dollar fell 0.1% to $0.5867 after the New Zealand government hinted at an announcement regarding the central bank. Meanwhile, the gold price reached a record high of $3,749.03 per ounce. The yield on the 10-year US Treasury bonds continued its rise to 4.1467%. Some Fed officials urged caution regarding the interest rate change cycle and emphasized inflation risks. Alberto Musalem from the St. Louis Fed, as well as Raphael Bostic and Beth Hammack, expressed concerns about managing inflation control. Stephen Miran also commented, noting the risk that a too-tight monetary policy could endanger the labor market. The euro remained stable at $1.1798. The dollar lost 4.5% against the Argentine peso after US Treasury Secretary Scott Bessent stated that "all options" to stabilize Argentina were being considered. Additional decisions would be made only after a meeting with Argentine President Javier Milei in New York. The Australian dollar was weaker at $0.6599. The offshore yuan remained unchanged at 7.1158 per dollar, while the British pound held steady at $1.35125.