There's Powell Tonight, Where Is The USD Going?


 Currency markets continued to display caution in the European session as investors awaited testimony from Federal Reserve (Fed) Chairman Jerome Powell.

This was reflected in the limited movement in the market, where the greenback traded slightly higher against most major currencies.

The euro, on the other hand, retreated slightly from the 2-week high it reached earlier, in addition to being supported by the hawkish statement of the European Central Bank (ECB).

Despite this, the Aussie dollar exhibited a somewhat different movement compared to other major currencies, which recorded a significant fall in the wake of the Reserve Bank of Australia's (RBA) policy decision.

The RBA raised interest rates by 25 basis points to 3.60%, but gave a less hawkish indication of the direction of policy next.

This echoes the central bank's statement that inflation appears to have peaked in Australia, signaling that it may be nearing the end of its tightening cycle.

Meanwhile, the yen rose slightly as investors focused on the final policy meeting for Bank of Japan (BOJ) Governor Haruhiko Kuroda on Friday.

Overall, investors' focus today remains on Jerome Powell who will testify before Congress on the central bank's monetary policy report.

Investors will be scrutinizing his speech for any indication of the central bank's policy direction next.

At the time of writing, the dollar index which measures the greenback's strength was trading slightly higher at 104.40 against a basket of major currencies.