FX.co ★ Dollar Firms Against Peers After Powell Hints At Steep Rate Hikes

After dropping to a one-week low, the U.S. dollar rebounded on Thursday, riding on comments from Federal Reserve Chief Jerome Powell that signaled a series of rate hikes, including a 50-basis points raise.

Participating in an International Monetary Fund panel, Powell said he believes it would be appropriate to raise rates "a little more quickly" and predicted a 50 basis point rate hike would be on the table at the Fed's May meeting.

"Our goal is to use our tools to get demand and supply back in synch, so that inflation moves down and does so without a slowdown that amounts to a recession," Powell said.

"I don't think you'll hear anyone at the Fed say that that's going to be straightforward or easy," he added. "It's going to be very challenging. We're going to do our best to accomplish that."

CME Group's FedWatch Tool currently indicates that a 50 basis point rate hike at the May meeting is a near certainty.

Traders also digested the latest batch of economic data.

A report from the Labor Department showed initial jobless claims edged down to 184,000 in the week ended April 16th, a decrease of 2,000 from the previous week's revised level of 186,000.

Economists had expected jobless claims to dip to 180,000 from the 185,000 originally reported for the previous week.

A report from Federal Reserve Bank of Philadelphia showed growth in Philadelphia-area manufacturing activity slowed more than expected in the month of April. The Philly Fed said its diffusion index for current activity slumped to 17.6 in April from 27.4 in March. While a positive reading still indicates growth, economists had expected the index to show a more modest drop to 21.0.

The Conference Board also released a report showing its reading on leading U.S. economic indicators increased in line with economist estimates in the month of March.

The dollar index, which dropped to 99.82 in the Asian session, climbed to 100.64 later on in the day, before paring some gains. At 100.55, the index was up 0.16% from the previous close a little while ago.

Against the Euro, the dollar is trading at $1.0841, firming from $1.0857. Final data from Eurostat showed Eurozone inflation accelerated sharply, but less than initially estimated, to set a record high in March underpinned by surging energy prices.

Consumer price annual inflation jumped to 7.4% from 5.9% in February. Although the rate was revised down slightly from the flash estimate of 7.5%, it was the strongest on record.

The dollar is trading at $1.3031 against Pound Sterling, strengthening from $1.3067.

Against the Japanese currency, the dollar is stronger, fetching 128.29 yen a unit, compared with 127.89 yen a unit on Wednesday.

The dollar is at 0.7375 against the Aussie, gaining more than 1% from 0.7451.

The Swiss franc is weaker at CHF 0.9533 a dollar, easing from CHF 0.9486, while the Loonie is down more than 0.6% at C$1.2577 a dollar.