The dollar was lower against the Japanese yen, with falling 0.4% to 108.07.
Powell followed up on Thursday by saying that a rate cut is likely at the Fed's next meeting as businesses slow investment due to trade disputes and a global growth slowdown. Of specific interest was Powell's hints about whether or not the Fed will cut interest rates this month.
The euro, meanwhile, was up 0.1%against the dollar at $1.1256, even as expectations grew that the European Central Bank would loosen policy.
Powell said the central bank stands ready to "act as appropriate".
In a sign of the bond market rally that has driven yields sharply lower, Germany yesterday sold 10-year bunds at a yield of minus 0.26pc and without a coupon.
The Dow Jones Industrial Average .DJI rose 227.88 points, or 0.85%, to 27,088.08, the S&P 500 .SPX gained 6.84 points, or 0.23%, to 2,999.91 and the Nasdaq Composite .IXIC dropped 6.49 points, or 0.08%, to 8,196.04. Going forward the focus will be by how much will the Fed lower interest rates.
"So gold prices could stay on an upward path as central banks pivot to an easing stance, the US dollar turns gradually weaker with a more dovish Fed and the burden of harmful yielding debt rises".
Consumer prices rose 0.1 percent month-on-month, while 12-month inflation excluding volatile energy and oil prices, added a tenth of a percentage point to 2.1 percent. Both the Dow and the S&P also hit fresh intra-day records.
"Evidence of higher inflation will be warmly received by the Fed", said Joe Manimbo, senior market analyst, at Western Union Business Solutions in NY.
'It appears that uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the United States economic outlook, ' Powell said.
In his Senate appearance, Powell elaborated on the Fed's concerns about persistently low inflation as a reason that there is growing support for rate cuts, citing the problems Japan and Europe are facing in fighting chronically low inflation.
Libra was unveiled by Facebook last month along with plans orchestrated by the social media giant for a parallel payments system to facilitate transactions.
"It is fair to say that such a cut would be unprecedented in modern times given overall financial conditions and the balance of economic data", Michael Shaoul, chairman and CEO of Marketfield Asset Management, wrote in a note.
A fall in biotech and pharmaceutical shares pulled down the Nasdaq, however, as the administration of U.S. President Donald Trump withdrew a rule that would have required health insurers to pass on rebates from drugmakers.
Spot gold fell 0.90% to $1,406.04 an ounce on stronger-than-expected US inflation data.