Dollar edges lower ahead of key Powell speech; Australian dollar soars By Investing.com
Currencies 48 minutes ago (Feb 07, 2023 03:01AM ET)
By Peter Nurse
Investing.com – The U.S. dollar slipped lower in early European trade Tuesday, consolidating after recent gains ahead of a key speech from Fed Chair Jerome Powell, while the Australian dollar surged after the Reserve Bank hiked interest rates.
At 03:00 ET (08:00 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% lower at 103.445, just off its recent one-month high.
The index is pausing for breath after its rally in the wake of Friday’s strong employment report, which prompted traders to raise their forecasts of how high Federal Reserve interest rate levels will need to rise in order to tame inflation.
Attention is now turning to a speech by Federal Reserve Chairman Jerome Powell at the Economic Club of Washington later on Tuesday.
“Fed Chair Jerome Powell in last week’s post-FOMC press conference outlined a potential ‘goldilocks’ scenario where inflation declines without a material rise in unemployment.” said analysts at ING, in a note. “We’ll see how much confidence he has in this scenario.”
Elsewhere, AUD/USD rose 0.7% to 0.6929 after the Reserve Bank of Australia raised its cash rate by an expected 25 basis points, but also signalled further rate hikes ahead.
“Further increases in interest rates will be needed over the months ahead to ensure that inflation returns to target and that this period of high inflation is only temporary,” RBA Governor Philip Lowe said in a statement.
EUR/USD traded 0.1% lower at 1.0719, struggling to benefit from dollar weakness, having slid to 1.0709 in the previous session, the lowest since Jan. 9.
German industrial production fell more than expected in December, decreasing by 3.1% on the previous month, data showed earlier Tuesday, instead of the expected drop of 0.7%.
GBP/USD rose 0.1% to 1.2026, after tumbling to a one-month low of 1.2006 in the previous session.
Britain’s housing market stabilized in January, ending four months of decline, with mortgage lender Halifax calling property prices unchanged last month after a 1.3% drop in January.
USD/JPY fell 0.4% to 132.15, but the pair remains near Monday’s one-month high of 132.90 as speculation remains rife over who will be the next Bank of Japan Governor, with Reuters reporting that the candidates to succeed incumbent governor Haruhiko Kuroda will be presented by next week.
Dollar edges lower ahead of key Powell speech; Australian dollar soars
Terms And Conditions
(C) 2007-2023 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.