The US dollar was generally firm today following the release of positive macroeconomic indicators in the United States. The testimony of Fed Chair nominee Jerome Powell did little to disrupt markets, and it is expected that he will continue the policy of incumbent Chair Janet Yellen.
Virtually all of Tuesday’s US reports were good, beating market expectations. House prices rose faster than anticipated, the manufacturing index demonstrated a surprising jump, and the consumer confidence improved unexpectedly. Now, traders wait for tomorrow’s release of a revised report for gross domestic product, counting on a positive revision.
Powell, nominated by US President Donald Trump as the new Federal Reserve chief, was speaking today at confirmation hearing before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, Washington, D.C. He promised to try to keep monetary policy as predictable as possible but warned about inherent unpredictability of future:
We expect interest rates to rise somewhat further and the size of our balance sheet to gradually shrink. However, while we endeavor to make the path of policy as predictable as possible, the future cannot be known with certainty. So we must retain the flexibility to adjust our policies in response to economic developments.
EUR/USD declined from 1.1896 to 1.1879 as of 17:39 GMT today. GBP/USD slumped from 1.3314 to 1.3234. USD/JPY traded at 111.13 after opening at 111.07 and rising to the daily high of 111.46.
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