Dollar drops the most in nearly 2 months

The dollar tumbled from two-week highs on Wednesday after Federal Reserve Chairman Jerome Powell said that interest rates are just below neutral, raising expectations that the U.S. central bank is closer to the end of its rate hike cycle.

As of 4:24 p.m. in New York, the dollar index traded 0.77 percent lower at 89.67 against a basket of currencies, its biggest decline since Jan. 24. It fell nearly 1 percent that day.

As the dollar fell, gold jumped. Gold futures for April rose 1.6 percent to $1,333 per ounce.

President Donald Trump has also expressed frustration with Fed rate hikes. Trump said in a Washington Post interview on Tuesday that he was “not even a little bit happy” with the Fed chairman and that the central bank’s policies are hurting the economy.

Minutes from the Fed’s Nov. 7-8 meeting, to be released on Thursday, will next be evaluated for further indications of how many more times the U.S. central bank is likely to hike interest rates.

Investors are also focused on the G20 summit in Buenos Aires on Friday and Saturday, where Trump and his Chinese counterpart, Xi Jinping, are scheduled to discuss contentious trade matters.

The dollar lost more ground as Powell briefed journalists, and he did speak about the trade concerns in response to a question. He said Fed officials have been hearing from corporate officials who are worried about the Trump administration’s trade actions.

The Australian dollar rose 0.7 per cent on the greenback to $0.7369 and the New Zealand dollar was up 0.4 per cent at $0.6906.

Japan’s yen weakened 0.3 per cent to ¥113.75 per dollar. Euro gained 0.2 per cent to $1.1337 and the pound was virtually flat at $1.2746. The dollar index, dipped 0.2 per cent on Monday to 97.071.