The dollar is under the pressure after the speech of the Fed Chairman Powell
There was a speech of the US Federal Reserve Chairman, Powell during the publication of the semi-annual report on the monetary policy of the Congress. The speech was more dovish. The market was particularly worried by a statement about the decreasing inflationary pressure in the USA. Against the background of tomorrow’s US inflation report, this may indicate weak data. Also it is worth to note the statement that the Fed will adhere to a policy of stabilizing the US economy. Against the backdrop of trade uncertainty and a slowdown in inflation, this may indicate stimulation of US monetary policy in the future.
The market took the tone of the Fed’s Chairman extremely softly and took into account in the price of the US dollar a slowdown in inflation and an increase in the probability of the US Fed rates cut. As a result, the US dollar index was under considerable pressure and updated a low at the level of 97.10, which slowed down the upward trading channel, which can be traced from the beginning of the month.
The US dollar index is expected to test support levels: 97.00 and 96.80 in conditions of maintaining optimism in the market and increasing expectations of the US rates cut due to a slowdown in inflation. But it is also worth noting the lack of evidence that puts pressure on the American dollar and its oversold, resistance levels: 97.30 and 97.50.
Fig. The US dollar index chart. The current price is 97.10 (10-year US government bonds yield is the blue line)
Read also: “How long will last the US trade war againsta all?”
Hanzenko Anton
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