Williams Caps Dollar Rally, Pound Consolidates Near Lows
New York Fed President John Williams tempered expectations for another Federal Reserve interest rate hike at the upcoming October meeting, limiting the dollar's rally and allowing the pound to consolidate near multi-week lows.
The pound-to-dollar exchange rate has been steady around 1.3258 on Wednesday after Williams' comments, which suggested that further action may not be necessary immediately.
Williams emphasized that there is 'no need for urgency' following the September hike and that incoming data should provide greater clarity on the economy before the Fed decides on its next move.
Around 1.3258, the pound-to-dollar rate has been consolidating near two-month lows, which were reached last week due to strong US data and a hawkish Fed.
TD Securities' FX Strategist Howard Du notes that the dollar rally has become stretched against several major currencies, including the euro, the pound, and the Canadian dollar.