The current stance of monetary policy is likely to remain appropriate and it would take a material reassessment in the outlook for the Fed to change its current stance, Powell said. The dollar index rose to 98.00 as Powell spoke, the highest since Oct. 17, before retracing back to 97.53, down 0.16% on the day.
Broad expectations heading into the meeting that the Fed would adopt a more hawkish tone was seen as limiting dollar strength. "By and large the market was positioned for a less dovish or a hawkish cut today, but there aren't any conclusive signals that the Fed is done just yet," Rai said. The dollar had briefly gained earlier on Wednesday after data showed that the US economy slowed less than expected in the third quarter.
The data "pointed to below trend growth, but still relatively steady and pretty solid growth in the context of what's going on in the rest of the world," said Erik Nelson, a currency strategist at Wells Fargo in New York. Payrolls data for October released on Friday is the next major US economic focus. The greenback also temporarily dipped on reports that Chile has withdrawn as host of an APEC trade summit in November where the United States and China had been expected to take major steps toward ending a 15-month-old trade war. Optimism that the US and China will reach a deal has boosted risk sentiment this week.