The U.S. dollar firmed against other major currencies on Monday, reacting to U.S. Federal Reserve Chairman Jerome Powell’s comments that suggested the central bank might resort to aggressive monetary tightening this year.
“We will take the necessary steps to ensure a return to price stability,” Powell said in remarks to the National Association for Business Economics. “In particular, if we conclude that it is appropriate to move more aggressively by raising the federal funds rate by more than 25 basis points at a meeting or meetings, we will do so.”
He added, “And if we determine that we need to tighten beyond common measures of neutral and into a more restrictive stance, we will do that as well.”
The comments from Powell come after the Fed raised interest rates by 25 basis points last week and signaled more rate hikes are likely in the coming months.
Meanwhile, on the geopolitical front, Kremlin spokesman Dmitry Peskov said that there had been no significant progress yet in the talks to hold a possible meeting between President Vladimir Putin and his Ukrainian counterpart Volodymyr Zelenskiy.
Israel’s Prime Minister said that even though there had been progress in cease-fire talks between Russia and Ukraine, “very large” gaps remained between the two sides.
Ukrainian President Volodymyr Zelensky said that he is prepared for talks with his Russian counterpart Vladimir Putin, but a failure would mean the beginning of a third World War.
The dollar index climbed to 98.53, gaining about 0.3% from the previous close, after having eased to 98.16 in the Asian session.
Against the Euro, the dollar strengthened to $1.1015 from $1.1051.
The dollar is trading at $1.3157 against Pound Sterling, gaining from $1.3177 a unit of the British currency.
The Yen is weak against the dollar, easing to 119.49 a dollar, from 119.15 on Friday.
Against the Aussie, the dollar is at 0.7396, strengthening from 0.7414.
The Swiss franc is down at 0.9337 a dollar, losing ground from 0.9319. The Loonie is up marginally at C$ 1.2596 a dollar, riding on higher crude oil prices.