U.S. Dollar Appreciates Before Powell's Testimony
The U.S. dollar was higher against its most major rivals in the European session on Tuesday, as investors awaited testimony by U.S. Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen before Congress for additional clues on the direction of U.S. monetary policy.
In remarks prepared for the congressional hearing, Powell said that the economic recovery had progressed more quickly than expected and appeared to be strengthening.
“While the economic fallout has been real and widespread, the worst was avoided by swift and vigorous action,” Powell said.
Since the recovery is far from complete, the Fed will continue to provide support to the economy as long as it needed.
Powell cautioned that the sectors of the economy most adversely affected by the resurgence of the virus and by greater social distancing remained weak.
The central bank is committed to using its full range of tools to support the economy and aid the recovery from the pandemic, the Fed chief added.
The currency climbed in the Asian session, as the investors’ focus turned to Powell’s testimony due later in the day.
The greenback rose to 1.2595 against the loonie, its strongest level since March 11. The greenback was trading at 1.2522 against the loonie at yesterday’s close. The greenback is seen finding resistance around the 1.29 mark.
The greenback spiked up to a 2-week high of 0.7656 versus the aussie and more than a 3-month high of 0.7020 versus the kiwi, from Monday’s closing values of 0.7744 and 0.7160, respectively. Next key resistance for the greenback is likely seen around 0.75 versus the aussie and 0.68 versus the kiwi.
The U.S. currency moved up to a 2-week high of 1.1862 against the euro and a 1-1/2-month high of 1.3752 versus the pound, compared to yesterday’s closing values of 1.1932 and 1.3863, respectively. On the upside, 1.16 and 1.33 are possibly seen as its next resistance levels against the euro and the pound, respectively.
The greenback was up at 0.9332 versus the franc, marking a 2-week high. At yesterday’s trading close, the pair was quoted at 0.9231. If the greenback extends rise, 0.95 is possibly seen as its next resistance level.
In contrast, the greenback held steady against the yen, after touching near a 2-week low of 108.41 at 6:15 am ET. The pair had closed Monday’s deals at 108.84.
At 12:00 pm ET, Federal Reserve Chair Jerome Powell will testify before the House Financial Services Committee on the CARES Act, along with Treasury Secretary Janet Yellen, via satellite.