07.02.202321:09:00UTC+00U.S. Dollar Loses Ground Against Major Rivals After Powell's Comments

The U.S. dollar shed ground against most of its major counterparts on Tuesday, reacting to comments from the Federal Reserve Chair Jerome Powell at an event at the Economic Club of Washington.

In a Q&A session at the event, Powell told Carlyle Group co-founder David Rubenstein that he expects 2023 to be a year of "significant declines in inflation."

Powell said inflation is beginning to ease, though he expects it to be a long process and cautioned that interest rates could rise more than markets expect if the economic data doesn't cooperate.

"The disinflationary process, the process of getting inflation down, has begun and it's begun in the goods sector, which is about a quarter of our economy," Powell said during an event in Washington, D.C. "But it has a long way to go. These are the very early stages."

The dollar index, which climbed to 103.96 around mid morning, dropped to 103.00 after Powell's comments. Despite a swift recovery, the index weakened again and was last seen at 103.35, down 0.26% from the previous close.

Against the Euro, the dollar firmed to 1.0670 but slipped to 1.0768 after Powell's remarks. After recovering to around 1.070 subsequently, the dollar eased to 1.0731.

The dollar weakened to 1.2050 against Pound Sterling. Against the Japanese currency, the dollar drifted down, fetching 131.06 yen a unit, compared with 132.65 yen on Monday.

Against the Aussie, the dollar weakened to 0.6959 from 0.6883. The Swiss franc firmed to 0.9219 against the dollar, gaining from 0.9284. The loonie settled at 1.3402 a dollar, gaining from around 1.3450.