Dollar Steadies Ahead of Powell’s Testimony By Investing.com

Investing.com – The dollar was little changed on Tuesday as investors awaited further clues on monetary policy when Federal Reserve Chairman Jerome Powell testify on the economy and monetary policy later in the day.

The  that tracks the dollar against a basket of six major currencies slipped 0.01% at 94.26 by 1:44AM ET (05:44 GMT). Powell will testify before the U.S. Senate Banking Committee at 10:00AM ET (14:00 GMT) on Tuesday, followed by a testimony at the same time on Wednesday to the House of Representatives Financial Services Committee.

Ahead of Powell’s appearance, the Fed gave a positive assessment of the U.S. economy, insisting that strong labor markets and inflation would support the central bank’s plan to continue with gradual rate hikes.

Analysts and many of Powell’s colleagues expect two more interest rate increases this year amid a continued economic expansion. The U.S. Commerce Department revealed on Monday that the country’s retail sales increased by 0.5% for the fifth month in a row, further supporting expectations of a Fed interest rate increase.

“In short, we expect the chairman to signal optimism on growth and inflation, consistent with continued ‘gradual’ tightening,” wrote Jim O’Sullivan, chief economist at High Frequency Economics.

“He will undoubtedly acknowledge some downside risks associated with the administration’s trade warmongering, but he will likely try to avoid sounding critical of the administration.”

Elsewhere, the pair rose 0.19% to 0.7434, while the pair gained 0.11% to 112.42.

“It seems that the dollar-yen is kind of immune to the Chinese risk at the moment,” said Mizuho Securities’ chief currency strategist Masafumi Yamamoto. “But there is a risk that if the remains weak and the renminbi keeps depreciating, it will cap the Australian dollar’s top side,” he said.