By Gina Lee

Investing.com – The dollar was down on Wednesday morning in Asia, dropping to its weakest since November 2021 after U.S. Federal Reserve Chairman Jerome Powell’s warning that it could take several months to decide on running down the central bank’s $9 trillion balance sheet.

It was down 0.7% at 95.560 (Tuesday, July 7, 2007) – its lowest level since Nov. 30-.

The exchange rate climbed 0.06% to 115.335. Dollar recovered from the one-week low at 115.045 earlier in the week.

Inching up 0.09% to 0.7216, the pair was supported by the more risky Australian dollar which reached its highest point in just over a week. It rose 0.07%, to 0.6791.

This pair fell 0.13% to 6.3655. Wednesday’s showed that the consumer price index (CPI) grew 0% and 1.5% , while the grew 10.3% year-on-year in December.

This pair climbed 0.08% to 1.3645. The pound rose to $1.3641, the highest level since Nov. 4, 2020.

Powell was speaking at a U.S. Senate Banking Committee hearing for his re-nomination at the Fed’s helm. According to Powell, the U.S. is ready for higher interest rates, a runoff from its asset holdings (or quantitative tightening) in order to address inflation. However, he said that there are still many options to balance the Fed’s finances and that it may take up to four meetings to make decisions.

Other Fed officials, however, adopted a more cautious tone which calmed fears about a sudden tightening. Raphael Bostic (Atlanta Fed President) said Monday that high inflation combined with a strong recovery justified a swift rundown of Fed asset positions.

Pepperstone’s head of research Chris Weston stated in a note that Powell did not push for market pricing to reflect expected Fed rate increases, but they have seen relief “after he tried to dispel the belief that markets are on a fixed path.”

The note stated that the “Risk Is Buoyant” was weighing both on the dollar and safe-haven the yen.

Investors are now awaiting the U.S., and the, which will be released later today. They will be following a day later.