The dollar edged up from a three-month low on Wednesday, as investors dialed back expectations for aggressive U.S. rate cuts but underlying conviction the Federal Reserve will need to ease policy soon capped greenback gains.

Fed Chairman Jerome Powell on Tuesday stressed the central bank’s independence from U.S. President Donald Trump, who is pushing for significant rate cuts.

St. Louis Fed President James Bullard, seen as one of the most dovish U.S. central bankers, surprised some investors by saying a 50 basis-point cut in rates “would be overdone.”

While this hosed down expectations for a half percentage point cut at the Fed’s July meeting, investors are still expecting at least a quarter percentage point reduction.

The scaling down in expectations for large rate cuts from the Fed also knocked gold prices by more than 1%, putting the precious metal on course for its first decline in seven trading sessions.

The New Zealand dollar bounced against the greenback after the nation’s central bank skipped a chance to cut interest rates at a policy meeting.

Traders still expect the Fed, the Reserve Bank of New Zealand, and other central banks to cut rates in coming months as the outlook for global growth dims, which will be a major driver of currency moves in coming months.

“The Fed is still likely to cut rates,” said Shinichiro Kadota, foreign exchange strategist at Barclays.

“How much of a cut will depend on the economic data and the Group of 20 meeting. I would not expect this rally in the dollar to extend much further.”

The dollar index against a basket of currencies stood at 96.289 on Wednesday, just above a three-month low of 95.843 touched on Tuesday.

The U.S. currency rose 0.25% to 107.44 yen, rebounding from 106.77 yen, its lowest level since its flash crash in early January.

Interest rate futures are now pricing in a 33% chance of a 50 basis point cut at the Fed’s July meeting, down from 38% earlier, while a cut of at least 25 basis points is seen as certain, according to the CME Group’s FedWatch Tool.

Traders are also eyeing a meeting between Trump and Chinese President Xi Jinping at a G20 summit over the weekend, but expectations are low for a breakthrough to end a year-long trade war between the world’s two largest economies.

Despite the slight moderation in Fed cut hopes, benchmark 10-year U.S. Treasury yields slipped below 2% due to worries about a prolonged U.S.-Chinatrade war.

“The dollar’s upside is heavy, particularly against the yen,” said Junichi Ishikawa, senior foreign exchange strategist at IG Securities.

“Powell is worried about curbing excess expectations, but Treasury yields are clearly heading lower and U.S. economic data are not looking great. A rate cut in July is a done deal.”

The New Zealand dollar rose 0.21% to $0.6552 after the RBNZ’s decision to hold its cash rate at 1.5% as expected.

Still, the tone was unmistakably dovish with minutes showing the policy-making committee discussed whether to ease at the meeting and agreed a move would likely be needed in time.

Markets imply around a 63% chance of a reduction to 1.25% at the RBNZ’s next meeting on August 7, and are wagering heavily on 1% by year end.

Gold fell 1.0% $1,408.60 per ounce, retreating from a six-year high of $1,438.63.

The British pound slipped 0.23% to $1.2670 before the Bank of England publishes its closely-watched quarterly inflation forecasts later on Wednesday.

The BoE has said rates would need to rise in a gradual fashion as long as Britain avoids a no-deal exit from the European Union.

However, sterling remains dogged by concerns that eurosceptic Boris Johnson will become Britain’s next prime minister, increasing the chance of a no-deal Brexit.

The euro was little changed at $1.1356, pulling back slightly from a three-month high of $1.1412.