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The Greenback slips ahead of Powell speech

USD - United States Dollar

Federal Reserve Chairman Jerome Powell kicked off his semi-annual monetary policy testimony to Congress this morning. He is expected to stick to the line that the bank will "act as appropriate," which is an attitude that should bolster a rate cut at the July 30-31 meeting. He might also show support for the Fed’s independence, as lawmakers will probably ask him about the chronic assessment from President Donald Trump.

According to Bloomberg, Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer spoke on the phone with Vice Premier Liu He and Commerce Minister Zhong Shan yesterday in the first confirmed contact between the two parties since Trump and Xi met at the G-20. Both sides said dialogue would continue without outlining next steps. However, China's leadership stays cautious on the chances of a lasting deal, with many following Trump's 2020 election strategies.

Another US dollar driver for today’s trading session will be the minutes of the last FOMC policy meeting, which will be released at 2:00 pm Est.

Key Movers

Early today, in the European trading session, the Sterling was relatively unmoved as it sees critical economic data from the UK. The GDP monthly month-to-month in May came in at 0.3 percent, higher than the previous month at -0.4 percent. GDP Manufacturing Production came in at 0 percent, much better than the number last month of -1.1 percent. The headline aligns with estimates, and that's broadly associated with a recovery in car production, which is up by a record 24 percent month-to-month following a significant drop in the month of April.

A few minutes ago, the BoC left its key rate at 1.75 percent and the USD/CAD pair has erased initial loses, moving 60 pips to the upside within few seconds. It is trading slightly below 1.3150 at the moment.

Expected Ranges

USD/CAD: 1.3096 - 1.3150 ▲

EUR/USD: 1.1220 - 1.1267 ▲

GBP/USD: 1.2483 - 1.2544 ▲

AUD/USD: 0.6927 - 0.6969 ▲

NZD/USD: 0.6603 - 0.6655 ▲