Dollar Slides Ahead of Powell’s Speech

The currency markets in Asia saw little moves on Tuesday morning as investors await Powell’s first testimony at the Congress later today that would give direction to the market this week.

The US dollar index, which measures the greenback against a basket of six major currencies, slid 0.03% to 89.75 at 10:30pm ET, after an overnight climb from 89.44 to 89.92.

All eyes are on Jerome Powell this week as he is to make his first major appearance as head of the Federal Reserve on Tuesday. His speech is not expected to rock the markets but investors would see if his tone will be too dovish or hawkish.

The dollar edged 0.03% up against the yen to 106.97. The USD/JPY pair has been trading in the 106 range recently and testing the 107 handle.

The yen buying came following comments by Japan’s economy minister Motegi that he expected the CPI figures to keep rising steadily. Bank of Japan governor Kuroda also stated that the central bank would stay aggressive on their asset purchasing programs until the the country’s economy achieves the lofty 2% inflation target.

The AUD/USD pair dipped 0.10% to trade at 0.7846. Australia continues to lag behind the global trend in tightening as The Reserve Bank of Australia firmly stays with the wait-and-see mode, holding the rates down well into 2020.

Elsewhere, The People’s Bank of China set the fix rate against the dollar at 6.3146 versus yesterday’s rate of 6.3378. The USD/CNY pair quoted at 6.3050, down 0.16%. Focus in China this week is on President Xi’s possible extension in his tenure after the Party scrapped the two-term limit.

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