2023.12.0119:05:00UTC+00Powell's Dovish Comments Pull Down U.S. Dollar

The U.S. dollar fell against its major counterparts in the New York session on Friday, as the nation's manufacturing activity contracted for the thirteenth consecutive month in November and Federal Reserve Chair Jerome Powell's comments boosted hopes that interest rates have peaked.

Data from the Institute for Supply Management showed that the manufacturing PMI came in at 46.7 in November, unchanged from October, with a reading below 50 indicating a contraction. Economists had expected the index to inch up to 47.6.

In his speech at Spelman College in Atlanta, Powell acknowledged recent signs of slowing price growth and pledged to move forward carefully, as the risks of under- and over-tightening are becoming more balanced.

"It would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance, or to speculate on when policy might ease," Powell said.

Powell's comments sparked hopes that the central bank is done raising rates and could start lowering them in May.

The dollar index eased 0.01 percent to 103.14.

The greenback dropped to 1.2696 against the pound and 0.8697 against the franc, from yesterday's close of 1.2623 and 0.8751, respectively. The greenback is seen finding support around 1.31 against the pound and 0.85 against the franc.

The greenback declined to 2-day lows of 0.6674 against the aussie and 0.6202 against the kiwi, from Thursday's close of 0.6604 and 0.6152, respectively. The greenback is likely to face support around 0.69 against the aussie and 0.64 against the kiwi.

The greenback weakened to a 2-day low of 146.81 against the yen and more than a 2-month low of 1.3486 against the loonie, from its previous close of 148.18 and 1.3560, respectively. The currency may possibly face support around 142.00 against the yen and 1.32 against the loonie.

The greenback retreated to 1.0885 against the euro, from a 2-week high of 1.0828 seen at 11 am ET. Should the greenback falls further, it is likely to test support around the 1.12 region.