Dollar underpinned by Powell; euro at 5-week low vs greenback

Tokyo

THE dollar held firm on Thursday, drawing support after the Federal Reserve's new chief Jerome Powell struck an optimistic tone on the US economy in a boost to rate hawks that sent global stocks tumbling.

In contrast, benign inflation data in the euro zone dented expectations that the European Central Bank will dial back its stimulus, slamming the euro to five-week lows against the dollar and a six-month nadir against the yen.

The dollar index rose to a five-week high of 90.746, as Mr Powell's optimism on the US economy suggested the Fed is going to raise interest rates four times this year, one more than what markets had expected.

On the other hand, ECB president Mario Draghi said on Monday that slack in the …