Finance
Dollar holds steady as investors weigh comments from Fed's Powell
Published by Global Banking and Finance Review
Posted on September 23, 2025
4 min readLast updated: January 21, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on September 23, 2025
4 min readLast updated: January 21, 2026
The U.S. dollar holds steady as investors weigh Fed Chair Powell's remarks, with impacts on currency exchange rates and gold prices.
By Chibuike Oguh and Canan Sevgili
NEW YORK/LONDON (Reuters) -The U.S. dollar held steady against major peers on Tuesday as investors weighed commentary from Federal Reserve officials including Chair Jerome Powell, while the Swedish krona gained after the Riksbank delivered a hawkish 25-basis-point rate cut.
The dollar was down 0.11% at 0.791 against the Swiss franc
The euro was up slightly by 0.08% at $1.1812 while sterling was flat at $1.3517.
Powell said the central bank needed to continue balancing the competing risks of high inflation and a weakening job market in coming interest rate decisions, in remarks that stuck close to language last week when the central bank cut its benchmark rate by a quarter of a percentage point.
The Fed may be late in supporting the labor market and could need to speed the pace of rate cuts if demand conditions weaken and businesses begin to lay off workers, Fed Vice Chair for Supervision Michelle Bowman had said earlier on Tuesday.
Other Fed officials including St. Louis Federal Reserve President Alberto Musalem and Federal Reserve Governor Stephen Miran had delivered remarks on Monday.
"Powell reiterated some of his tone from the Fed decision last week, really," said Eugene Epstein, head of trading and structured products at Moneycorp in New Jersey.
"The question was always would his dovishness meet the expectations of dovishness, meaning how dovish he was going to be. And I would say it didn't really meet expectations ... Regardless, the tone was and is still concern over the job market. That's why I think you can make the argument that the dollar didn't retrace substantially."
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, was little changed at 97.25.
The dollar has been stable following the Fed interest rate cut but the most interesting thing is the strength of gold in the current environment, said Vassili Serebriakov, FX strategist at UBS in New York.
Money markets are currently pricing in a near-90% chance of a rate cut in October, down slightly from 92% a day earlier, per CME's FedWatch tool. Congressional funding talks this week to avert a government shutdown on September 30 have added to market jitters.
The dollar was down 0.08% to 147.56 against the Japanese yen.
The Swedish krona gained 0.19% to 9.331 versus the dollar after the Riksbank delivered a hawkish 25-basis-point rate cut.
"The degree of SEK outperformance post meeting strikes us as somewhat at odds with the surprise decision and meeting guidance," Goldman Sachs analysts led by Stuart Jenkins said in an investor note. "Some of the currency strength may be attributable to the firmer German PMI data released at the same time as the decision."
Meanwhile, markets showed a largely muted reaction to a mixed bag of business survey readings in Europe.
While the data showed that euro zone business activity grew at its fastest pace in 16 months in September, it also pointed to French economic activity contracting the same month at the sharpest rate since April.
The dollar was down 3.2% against Argentina's peso a day after U.S. Treasury Secretary Scott Bessent said all options were on the table for stabilising Argentina, including swap lines and direct currency purchases.
The Indian rupee weakened to an all-time low of 88.8070 against the U.S. dollar on Tuesday, pressured by the U.S. visa fee hike, muted foreign equity flows and a pick-up in hedging.
Gold prices climbed to a fresh record high of $3,790.82 an ounce, aided by safe-haven flows amid geopolitical uncertainty.
(Reporting by Chibuike Oguh: additional reporting by Canan Sevgili and Jaspreet Kalra; Editing by Jamie Freed, Lincoln Feast, Chizu Nomiyama, Nick Zieminski and Edmund Klamann)
Powell highlighted the need for the central bank to balance the risks of high inflation and a weakening job market in upcoming interest rate decisions.
The U.S. dollar held steady against major peers, with minor fluctuations such as a 0.11% decline against the Swiss franc and a 0.08% drop against the Japanese yen.
Money markets are currently pricing in a near-90% chance of a rate cut in October, slightly down from 92% the previous day.
The Swedish krona gained 0.19% against the dollar following a hawkish 25-basis-point rate cut by the Riksbank.
Gold prices climbed to a record high of $3,790.82 an ounce, driven by safe-haven flows amid ongoing geopolitical uncertainty.
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