U.S. Dollar Pulls Back as Kaplan Supports Fed Pause

Investing.com - The greenback pulled back from earlier gains in the session on Thursday as Dallas Federal Reserve President Robert Kaplan supported the central banks pause on rate hikes.

Kaplan, who is a more hawkish member of the Fed, said stimulus from tax cuts are waning and the impact of interest rates has yet to hit the U.S. economy.

“We would be well served and the country would be well served if we paused and were patient for some number of months and sort of get out of the way,” Kaplan said

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was at 96.192 from an earlier high of 96.433 as of 10:52 AM ET (15:52 GMT).

Last week the central bank signaled an end to its drive to tighten monetary policy due to concerns over slowing economic growth domestically and abroad.

The dollar was down against the safe-haven yen, with USD/JPY falling 0.25% to 109.67.

Elsewhere, the pound reversed course after Bank of England Governor Mark Carney said the markets should not prepare for a no-rate-hike scenario. The bank kept rates on hold Thursday as tensions over the U.K.’s plan to leave the EU has weighed on business and consumer spending. GBP/USD rose 0.3% to 1.2970.

The euro was down after the European Commision slashed economic growth forecasts for the year, with EUR/USD inching down 0.03% to 1.1356, after falling to an earlier low of 1.1327.

In Australia, the AUD/USD recovered 0.07% to 0.7107, while NZD/USD dipped 0.15% to 0.6761. The loonie was lower, with USD/CAD up 0.4% to 1.3262.

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