Today, investors will be sitting on the edge of their seats in anticipation of Fed Chair Powell’s testimony before the House Financial Services Committee, as they try to figure out by how much the Fed is willing to cut rates. Apart from Powell’s testimony, we also have a BoC meeting. We believe that this Bank will hold rates steady and reiterate its data dependency, staying among the few major central banks that have not turned their eyes to the cut button yet.
USD STANDS TALL AHEAD OF POWELL’S CONGRESSIONAL TESTIMONY
The dollar continued traveling north against all but one of the other G10 currencies on Tuesday and during the Asian morning Wednesday. That said, its gains were more modest, with most of the other currencies losing less than 0.20%. The exceptions were AUD, NZD and GBP. The currency against which the dollar lost some ground was CHF.
The weakening of the commodity-linked currencies Aussie and Kiwi, combined with the strengthening of the Swiss franc, suggests that investors may have stayed on the defensive. That said, although most EU bourses ended another session in negative...