Author Topic: Dollar edges up before Powell's testimony (Read 98 times)

FXshooting · « **on:** July 16, 2018, 10:10:42 pm »

Dollar edges up before Powell's testimony

TOKYO (Reuters) - The dollar slightly gained against its major peers on Tuesday, as investors awaited Federal Reserve Chairman Jerome Powell's first congressional testimony for any clues on the pace of U.S. interest rate rises.

Powell will testify on the economy and monetary policy before the U.S. Senate Banking Committee at 1400 GMT on Tuesday, followed by a testimony at the same time on Wednesday to the House of Representatives Financial Services Committee.

"It seems that the markets are focusing on whether or not the trade war between the U.S. and China may affect the outlook for the Fed's tightening," said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.

"Powell, who is Republican and close to the Trump administration, will not stress much about the negative side of the U.S.-China trade war," said Yamamoto, who expects dollar-yen to strengthen to 115 at a "very slow" pace.

Powell is likely to reaffirm the Fed's gradual monetary tightening policy in his testimony, although any suggestion of caution on trade could put a dent in the market's appetite for risk.

In early trading on Tuesday, the dollar edged 0.02 percent higher against a basket of six major currencies to 94.529 (DXY).

The dollar strengthened 0.2 percent against the yen to 112.41 yen , ticking up to a six-month high of 112.80 yen reached on July 13. Japanese markets reopened after a holiday on Monday.

The dollar's gains have this year been capped by worries over the intensifying trade dispute between the United States and China, although the concerns have not derailed the greenback's solid performance so far.

"It seems that the dollar-yen is kind of immune to the Chinese risk at the moment...(but) there is a risk that if the Shanghai Composite Index remains weak and the renminbi keeps depreciating, it will cap the Australian dollar's top side," said Yamamoto.

On Tuesday, the Australian dollar edged 0.1 percent lower to 0.7414 cents per dollar. The euro (EUR=) was nearly flat against the dollar, changing hands at $1.1709.

"I think the dollar is kind of consolidating after a sharp rise in April," said Shinichiro Kadota, senior FX and rates strategist at Barclays (LON:BARC).

"There could be some positioning adjustment in the morning, but beyond that, I think the market will wait for the testimony later in the day," he said.

Ref. www.investing.com/news/forex-news/dollar-edges-up-before-powells-testimony-1532191

https://www.fxshooting.com

News:

Author Topic: Dollar edges up before Powell's testimony (Read 98 times)

FXshooting

Dollar edges up before Powell's testimony