© Reuters. The dollar is stabilizing in view of the testimony of Powell
Investing.com – The dollar was little changed Tuesday, as investors await further clues on monetary policy when the federal Reserve chairman, Jerome Powell, will testify on the economy and monetary policy later in the day.
The dollar index, which tracks the dollar against a basket of six major currencies slipped 0.01% to 94,26 at 1:44 AM ET (05:44 GMT). Powell will testify before the banking Committee of the u.s. Senate 10: 00 am (14h00 GMT) on Tuesday, and then to the Committee on financial services of the House of representatives on Wednesday.
Before the appearance of Powell, the Fed gave a positive assessment of the us economy, insisting on the fact that a strong labour market and inflation would support the plan of the central bank to continue with gradual increases in rates.
Analysts and many colleagues of Powell expect two interest rate increases further this year, in the context of an economic expansion continues. The department of Commerce of the United States revealed Monday that retail sales in the country increased 0.5% for the fifth month in a row, thus confirming the forecasts of a rise in interest rates from the Fed.
“In short, we expect that the president reports optimism on growth and inflation, consistent with a progressive tightening,” wrote Jim O’sullivan, chief economist at High Frequency Economics.
“It will recognize without a doubt some of the downside risks associated with the trade war of the administration, but he may try to avoid to criticize the administration.”
Elsewhere, the AUD / USD pair has increased from 0.19% to 0,7434, while the pair USD / JPY has gained 0,11% 112,42.
“It seems that the dollar-yen is a little sheltered from the risk chinese for the moment,” said Masafumi Yamamoto, chief strategist of the currency at Mizuho Securities. “But there is a risk that if the Shanghai Composite remains low and that the renminbi continues to depreciate, it will reach the australian dollar,” he said.