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2020.02.2820:46:00UTC+00Dollar Loses Ground After Powell Hints At Monetary Easing

After briefly emerging into positive territory Friday morning after recent losses, the U.S. dollar retreated after the Federal Reserve Chair Jerome Powell said the bank will use their tools and act as appropriate to support the economy.

Powell said today that the coronavirus "poses evolving risks to economic activity."

"The fundamentals of the U.S. economy remain strong," Powell said in a statement released this afternoon. "However, the coronavirus poses evolving risks to economic activity. The Federal Reserve is closely monitoring developments and their implications for the economic outlook. We will use our tools and act as appropriate to support the economy."

The dollar index dropped to 97.96 in late afternoon trades and was last seen at 98.03, down nearly 0.5% from previous close.

Against the Euro, the dollar weakened to $1.1033, from Thursday's close of $1.1002. At its lowest in the session, the dollar was $1.1054, down more than 0.5%.

Against Pound Sterling, the dollar gained about 0.5%, as it strengthened to $1.2824.

The Japanese Yen strengthened to 107.99 a dollar, a long way up from 109.59 yen on Thursday.

The Aussie lost nearly 1% against the dollar at 0.6509. Against the loonie, the dollar was up at 1.3415, while against Swiss franc, it shed about 0.2% at 0.9657.

A report from the Commerce Department showed personal income climbed by 0.6% in January after inching up by a downwardly revised 0.1% in December. Economists had expected personal income to rise by 0.3% compared to the 0.2% uptick originally reported for the previous month.

Disposable personal income, or personal income less personal current taxes, also increased by 0.6% in January after edging up by 0.1% in December.

Meanwhile, the Commerce Department said personal spending rose by 0.2% in January after climbing by an upwardly revised 0.4% in December. Personal spending had been expected to rise by 0.3%, matching the increase originally reported for the previous month

Consumer sentiment in the U.S. improved by slightly more than initially estimated in the month of February, revised data from the University of Michigan revealed.

The consumer sentiment index for February was upwardly revised to 101.0 from the preliminary reading of 100.9. Economists had expected the index to be unrevised.

With the unexpected upward revision, the consumer sentiment index for February is a little further above the final January reading of 99.8.

Chicago-area business activity saw only a slight contraction in the month of February, according to a report released by MNI Indicators on Friday.

MNI Indicators said its Chicago business barometer jumped to 49.0 in February from 42.9 in January, although a reading below 50 still indicates a contraction in regional business activity. Economists had expected the index to rise to 45.9.

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