DXY rises ahead of Powell’s testimony
Daily Currency Update
The US Dollar Index (DXY) rose slightly this morning by around 0.12% to the 105.13 level ahead of Federal Reserve Chair Jerome Powell’s testimony. Powell is set to testify about Semi-Annual Monetary Policy before the Senate Banking Committee today. Markets will be keeping a close eye on his remarks for subtle clues regarding upcoming monetary policy decisions. In data news, the NFIB Small Business Index, which is a survey of small businesses that asks them to rate the relative level of economic conditions, came in higher than expected at 91.5 instead of the anticipated 90.3.Key Movers
In the Eurozone, markets reacted positively to the defeat of the far-right in the French elections. However, the National Assembly remained highly fragmented. This political deadlock may hinder the passage of legislation and could create a headwind for the euro. The EUR/USD dipped slightly this morning around the 1.08078 level.The GBP withered slightly this morning against the USD, retreating by around -0.12% to the 1.2788 level. Bank of England (BoE) Monetary Policy Committee member Jonathan Haskel, speaking at King’s College London, suggested that the BoE should maintain current interest rates at its August meeting due to the UK’s persistent tight labor market. Despite this, markets are still anticipating a roughly 65% chance of a rate cut on August 1st.
The USD/CAD pair edged lower this morning as markets awaited Powell’s testimony to the US Senate. Markets continued to expect the Fed to cut interest rates in September, a potential negative for the USD/CAD pair. In oil news, West Texas Intermediate (WTI) crude oil dropped from a 2-month high to the 81.99 level. This dip in oil prices could mean a downward pull on the commodity-linked Loonie.
Expected Ranges
- EUR/USD: 1.08121 - 1.08334 ▼
- GBP/USD: 1.27936 - 1.28252 ▼
- AUD/USD: 0.67279 - 0.67477 ▼
- USD/CAD: 1.36284 - 1.36474 ▲