The dollar is nearing its lowest level in seven weeks as Fed officials open the door to lower rates By Reuters

By Daniel Leussink

TOKYO (Reuters) – The dollar struggled to rebound Wednesday to its seven-week low after US central bank officials suggested interest rates may fall as risks rise. trade and global growth.

Federal Reserve Chairman Jerome Powell on Tuesday abandoned the usual reference that the Fed would be "patient" in its decision-making process on interest rates, saying the central bank would react as "if any "to the pressure of exchanges.

Against a basket of six peers barely moved, up 0.03% to 97.105, close to a recent low of 96.995 brushed overnight – its lowest since April 18th. It has now fallen 1.3% from the two-year high of 98,371 touched on May 23rd.

Masafumi Yamamoto, head currency strategist at Mizuho Securities, said the major currencies had not reacted to Powell's comments, as investors had already anticipated several Fed rate cuts in favor of the Fed. evolution of global growth prospects.

The Fed's comments come a day after St. Louis Federal Reserve Chairman James Bullard said in a speech that a rate cut might be needed "in the near future".

The rate cuts made by some central banks over the last few weeks could potentially herald a start of a global monetary easing cycle in order to avoid a deeper economic downturn.

"Central banks around the world are adopting a dovish tone – it's a preventative gesture," Yamamoto said.

"This does not necessarily mean that the economy is deteriorating, but rather that the outlook has deteriorated, mainly because of trade tensions between the United States and China, as well as the United States and Mexico. "

The Australian central bank on Tuesday lowered key rates to a record low of 1.25% and indicated its willingness to go even further if the outlook deteriorated.

Last month, New Zealand's central bank lowered its benchmark interest rate for the first time in two-and-a-half years, as it moved towards a slowing economy. against global uncertainties.

In South Korea last week, its central bank kept its political parameters unchanged, but adopted a more accommodating tone, while India is expected to lower its rates at its Thursday political meeting.

On Wednesday, the Australian dollar rose 0.05% to $ 0.6994 before the release of the first quarter gross domestic product data expected at 01:30 GMT.

According to median forecasts by Reuters analysts, GDP probably increased by 0.5% in the last quarter, while the annual rate was expected at 1.8%.

The euro is up 0.05% to 1.1257 USD, extending its gains to a fourth session.

Against the yen, the dollar remained stable at 108.165 yen to the dollar, near a five-month high of 107.845 – its highest level since Jan. 10 – hit in the previous session.