USD rebounds as Powell talks tough
The US dollar, as measured by the USD index, rebounded from six-week lows overnight as Federal Reserve chair Jerome Powell stepped up his rhetoric on his second day of testimony.
Powell was largely ignored by markets on the first day of his semi-annual testimony to Congress, but overnight the Fed chair reiterated that last week’s decision to hold interest rates steady was only to allow more time for decision making, and further hikes were likely.
US bond yields jumped with the US two-year yield moving from 4.71% to 4.79% — the highest level since before the Silicon Valley Bank crisis. The USD gained.
GBP mostly higher after BoE hikes
Across markets, key FX markets fell in the face of a stronger US dollar.
The AUD/USD fell 0.6% with the Aussie weaker in most other major markets.
The NZD/USD was also lower with the pair down 0.4%.
The USD/SGD gained 0.4% while the USD/CNH gained 0.3%.
The British pound was the main focus, weaker versus the US dollar but stronger in most other markets, after the Bank of England raised rates by 50 basis points to 5.00%. Before the release, the market had seen a 25bps hike as most likely.
Global PMIs due
Today, the focus moves to global purchasing manager indexes, the most up to date reading of the global economy.
Most recently, a clear shift has been seen, with services activity stronger, while manufacturing has been weaker.
USD stronger as Powell talks tough
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 19 – 23 June
All times AEST Have a question?
*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
