Investing.com – The dollar surged against a basket of major currencies as upbeat comments from Federal Reserve chair Jerome Powell on inflation and economy growth bolstered investor expectations for a faster pace of rate hikes.
The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.58% to 90.30.
In Capitol Hill testimony, Powell highlighted fiscal policy as new “tailwinds” for the economy, while reiterating that the central bank would stick with “further gradual” increases in interest rates.
While Powell appeared to adopt the narrative of “gradual” rate hikes from his predecessor Janet Yellen, his upbeat outlook on inflation and economic growth raised bets the central bank might hike rates four times in 2018.
“We’ve seen some data that will in my case add some confidence to my view that inflation is moving up to target,” Powell said. “We’ve also seen continued strength around the globe, and we’ve seen fiscal policy become more stimulative.”
Powell’s appearance overshadowed a mixed bag of economic data showing consumer confidence in the economy remained robust while durable goods orders fell short of expectations.
The rose to 130.8 in February from 124.3 in January, beating economists’ forecast for a reading of 121.
The Commerce Department reported orders for fell 3.7% last month. Economists’ had forecast a 2.4% fall.
The weaker durable goods number was downplayed by market participants amid weaknesses in aircraft components – civilian orders, parts, and defense orders – which was said to be volatile.
fell 0.41% to $1.3912 while fell 0.68% to $1.2232.
rose 0.50% to $1.2746 while rose 0.40% to Y107.37.
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