Powell said overnight that high inflation seemed linked to reopening, that it would be a mistake to act prematurely to tame it and that tapering bond buying was "still a ways off".The remarks pulled the dollar back from a three-month high against the euro and from a one-week high on the yen, though it soon found a footing in the Asia session as traders nervously awaited Chinese data to see whether it indicated a slowdown.
"The market is still on an uncertain path," said National Australia Bank strategist Rodrigo Catril, with investors neither entirely convinced Powell can keep policy super easy nor sure about the trajectory of recovery as the coronavirus mutates. "The big experiment is really the full reopening in the UK," he added. "If that could be successful, we think it's going to be a huge factor in terms of confidence and pricing a broader and sustained recovery," which could weaken the dollar.
The New Zealand dollar, which enjoyed its best session in nearly five months overnight, climbed only to its strongest in a week and sits below its 200-day moving average - even though the central bank said it would end bond buying next week.
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