The U.S. dollar tumbled on Friday after Federal Reserve Chair Jerome Powell signaled that an interest rate cut could be on the table as soon as September, a message that rattled markets and lifted global currencies.
Speaking at the annual Jackson Hole Economic Symposium, Powell acknowledged that the U.S. economy may now warrant policy easing, citing softer labor market conditions even as inflation remains above the Fed’s 2 percent target. His remarks were interpreted as the clearest sign yet that the central bank is preparing to shift course after holding its benchmark rate steady at 4.25–4.50 percent since mid-year.
The dollar index, which tracks the greenback against six major peers, fell 0.4 percent to 98.18 in the hours following his speech. The euro strengthened to $1.1664, while the dollar slid 0.5 percent against the yen to ¥147.61. Investors also moved quickly in futures markets, with pricing now showing roughly a 75 percent chance of a 25 basis point cut when policymakers meet next month.
For Ghana, the timing is favorable. The cedi, which has been staging an impressive recovery in recent weeks, is set to benefit further from a weaker U.S. currency. A softer dollar typically eases external financing costs, reduces pressure on foreign reserves, and bolsters sentiment toward frontier-market currencies. With the local unit already riding a wave of renewed confidence, the Fed’s dovish tilt provides additional tailwinds.
This week, trading on the interbank market has reflected that strength, with the cedi holding firm against the greenback even before Powell’s remarks. Friday’s dollar retreat adds a new layer of momentum, positioning the local currency to close the week on stronger ground.
Global markets also registered Powell’s impact beyond foreign exchange. U.S. Treasury yields slipped as traders adjusted expectations for monetary easing, while gold prices steadied after early losses. Equity futures in New York moved higher, reflecting hopes that lower borrowing costs could extend the market rally into the final months of the year.
The implications reach far beyond Wall Street. For emerging and frontier markets like Ghana, the prospect of cheaper global liquidity and a weaker dollar reduces capital outflow risks and provides breathing space on external debt obligations. With the cedi already on a solid footing, Powell’s hint at a September cut could mark the start of a fresh leg of gains.
