At a central banking conference on Thursday, New York Fed President John Williams argued for pre-emptive measures to avoid having to deal with too low inflation and interest rates.

That sent the dollar down before it bounced slightly in early Asian trade, after a New York Fed representative subsequently said Williams’ comments were academic and not about immediate policy direction.

Still, investors took his remarks along with separate comments from Fed Vice Chair Richard Clarida as another dovish signal from the central bank, which could be opening the way for a big rate cut at the end of this month.

The dollar stood at 107.42 yen JPY=, up 0.2% from late U.S. levels after having hit a three-week low of 107.21 the previous day.

The euro eased slightly to $1.1266 EUR= from $1.1282. On the week, the dollar is down 0.4% versus the yen and 0.1% on the euro.

The dollar index =USD, which hit a two-week low of 96.648, bounced to 96.792.

The greenback fell broadly on Thursday after Williams’ remarks bolstered bets that the Fed would cut interest rates by 50 basis points, rather than 25 basis points.

Williams said when rates and inflation are low, policymakers cannot afford to keep their “powder dry” and wait for potential economic problems to materialize.

That is especially true with neutral rates that would neither restrict nor accelerate the U.S. economy, he said. When adjusted for inflation, the neutral rate is near the Fed’s current policy rate, which is in a range of 2.25-2.50%.

Financial markets reacted quickly, with money market futures <FF#:> pricing in almost a 70% chance of a 50 basis point cut at its policy meeting on July 30-31 at one point.

The odds eased to around 40% after the New York Fed’s clarification of his speech.

All the same, Williams’ rate-cut view was echoed by Fed Vice Chair Clarida, who told Fox Business Network the central bank might have to act early and not wait “until things get so bad”.

“Williams’ comments were surprisingly dovish. The NY Fed went all the way to try to modify the message but no one seems to have done so for Clarida, who also said a very similar thing,” said Daisuke Uno, chief strategist at Sumitomo Mitsui Bank.

The dollar’s weakness also underpinned many emerging market currencies.

MSCI’s emerging market currency index .MIEM00000CUS has risen 0.35% so far this week to a four-month high of 1,657.07, coming within sight of this year’s double peak around 1,658, hit in late January and March.

The Brazilian real BRL= rose to five-month high of 3.7172 to the dollar on Thursday while the South African rand ZAR=D4 also scaled a five-month peak of 13.8175 and last stood at 13.855.

“If the Fed cut rates, that could encourage fresh investments in emerging currencies and other risk assets,” said Bart Wakabayashi, State Street Bank’s representative in Japan.

Elsewhere, the pound remained firm following stronger-than-expected UK retail sales numbers and after British lawmakers on Thursday approved proposals to make it harder for the next prime minister to force through a no-deal Brexit by suspending parliament.

The pound stood at $1.2552 GBP=D3, flat in Asia after 0.93% gains overnight, though it was the worst performer among G10 currencies so far this week, with a loss of 0.2%.

The biggest stride was made by the New Zealand dollar, which is up 1.3% for the week at a 3-1/2-month high of $0.6785 NZD=D4, as the Feds anticipated monetary easing is seen boosting the relative yield attraction of the kiwi.

The currency has the second highest bond yield among G10 currencies after the U.S. dollar.