The greenback continued to post modest gains during the European session with market focus now focused on Federal Reserve Chairman Jerome Powell’s testimony early Wednesday morning.
According to a written speech that was prepared for evidence before the Subcommittee on the Coronavirus Crisis, Powell acknowledged that the economy continues to show continued improvement from the effects of the Covid-19 pandemic, with increases in the job market and inflation.
However, according to Powell, inflation should return toward the Fed's 2% target once the supply imbalance is resolved.
Investors will follow the hearing for potential questions that will provide a more in-depth explanation of their views on the pace of economic recovery and the outlook for monetary policy.
The U.S. dollar rebounded after seeing a decline on Monday, with 10 -year U.S. treasury yields also rebounding above 1.50% in today’s trading session after sinking to a 4 -month low.
The pound failed to maintain its position above 1.39000 against the USD, amid concerns about Brexit and the spread of the Covid-19 variant of the Delta that has become dominant globally, according to the World Health Organization (WHO).
Meanwhile, the euro traded slightly lower following the US dollar's rebound. The market is now awaiting the release of manufacturing and services PMI data from the European Zone and the UK on Wednesday to see how far economic growth has been recorded so far.
