Dollar Reaches New Heights: Powell Hints At No Rate Cuts

The US dollar has reached a one-year high, thanks to Federal Reserve Chair Jerome Powell's indication that interest rates won't be cut anytime soon.

This hawkish stance has sent short-term Treasury yields soaring, affecting Wall Street and European futures. The dollar's strength has also weakened the euro, which is trading at one-year lows.

In fact, Asian shares looked to end the brutal week aided by the Chinese Data retail sales.

Powell's comments have tempered expectations for a rate cut next month, with Fed fund futures for next year slumping and implying just 71 basis points of rate cuts by end-2025. This means a rate cut next month is no longer considered a high-probability event, with only 61% priced in, down from 82.5% in the prior session.

The dollar's gains have been impressive, with a significant increase against major peers, while the euro has suffered heavy losses, down 1.75% for the week. Gold prices have also taken a hit, and oil prices are down as well, with Brent crude futures set for a weekly loss of 2.3%.