Dollar softens

TOKYO: The dollar´s safe-haven appeal dimmed on Monday after risk sentiment in the broader markets improved following a well-received speech from Federal Reserve Chairman Jerome Powell.

At a closely watched symposium at Jackson Hole, Wyoming, the Fed chairman on Friday emphasised the central bank´s push to raise interest rates despite President Donald Trump´s recent criticism of higher borrowing costs.

Powell made the case that gradual rate hikes are the best way to protect the U.S. economic recovery and keep job growth as strong as possible and inflation under control.

His comments were also seen to have disappointed some dollar bulls hoping for a more hawkish message. "The Fed chair suggested that rate hikes will continue amid a strong economy, but he also stressed that monetary tightening would be gradual," said Koji Fukaya, president of FPG Securities in Tokyo.

"That has been positive for equities, while enhanced risk appetite has been negative for the dollar," he added. The S&P 500 and the Nasdaq rose to record highs on Friday, with Powell considered to have stuck with the Fed´s policy narrative and doing little to change market expectations for rate hikes in September and December.