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Greenback ascends on Powell’s assessment of American economy
On Wednesday, the evergreen buck managed to jump because Fed Chair Jerome Powell came up with an upbeat assessment of the American economy at his Tuesday’s semi-annual congressional testimony.
The statesman stressed that the US key financial institution is on the verge of gradually increasing its interest rates.
Gauging the purchasing power of the major American currency versus a group of its crucial counterparts, the USD index gained 0.13% trading at 95.05.
The evergreen buck reached a six-month maximum versus the Japanese yen. The currency pair USD/JPY went up by 0.1% demonstrating 112.97 having ascended to 113.08 previously - its strongest value since January 9, underpinned by Powell’s positive remarks.
The evergreen buck is expected to keep ascending, especially versus Japan’s currency, with risk aversion in the equity markets fading away, as some financial analysts pointed out.
While long-term Treasury revenues aren’t soaring powerfully, it’s a pure reflection of investor demand for American assets, which generates a degree of dollar-buying in the market.
Aside from that Powell told that at his testimony that protectionism is capable of hindering economic surge. He told that those countries, which have remained open to trade, and which haven’t come up with barriers including duties, have ascended quicker. Respectively, these countries boast higher incomes as well as higher productivity.
Moreover, trade worries can have a strong impact on salaries as well as capital expenditures, as Powell pointed out.
In addition to this, the currency pair AUD/USD managed to decline 0.14% demonstrating an outcome of $0.7381, thus extending its rebound from Tuesday when this currency pair lost approximately 0.45% versus a broadly stronger major American currency.
As for Japan’s currency, it was nearly intact versus the evergreen buck. Meanwhile, on Wednesday, the currency pair USD/CNY headed south by nearly 0.02% trading at 6.7065.
Geopolitical factors and inflation remain the main drivers of financial markets. Let’s see how to use that in trading!
Have a look at the key financial instruments on Monday, February 28. Geopolitics is currently on all news frontlines. Western nations escalated sanctions on Russia for the invasion of Ukraine.
The Federal Open Market Committee, a committee within the Federal Reserve, will reveal a detailed record of the central bank’s last meeting on July 6 at 21:00 MT.
The Reserve Bank of Australia will announce its cash rate and make a statement about future rate policy on Tuesday, July 5, at 07:30 MT.
The US Institute for Supply Management will release ISM manufacturing PMI on July 1, 17:00 GMT+3.