Meanwhile, the risk-sensitive Australian dollar rallied against a backdrop of gains for U.S. equity futures and a more hawkish Reserve Bank. The New Zealand dollar also advanced.
Moving to a federal funds rate of between 5.00% and 5.25% “seems a very reasonable view of what we’ll need to do this year in order to get the supply and demand imbalances down,” New York Fed President John Williams said at a Wall Street Journal event.
Williams’s comments followed Chair Jerome Powell’s sticking by his interest rate outlook on Tuesday, when he reiterated that a process of “disinflation” was underway.
The dollar index, which measures the U.S. currency against six rivals, slipped 0.13% to 103.32, pulling away from the one-month high of 103.96 it touched on Tuesday at the peak of a rally following Friday’s stronger-than-expected jobs report. At the same time, 103 has provided a firm floor all week.
The employment data initially raised expectations…