USD News: Dollar Perks Up on Fed Comments
USD NEWS – The US dollar perked up on Wednesday in Asia after the upbeat comments from Federal Reserve Chairman Jerome Powell regarding the health of the economy, but he also admitted that there were some challenges on the horizon.
According to Powell during the first day of a 2-day Congressional meeting at the Senate Committee on Banking, the US central bank was in “no rush to make a judgment” over further changes to interest rates. However, he also acknowledged that the bank was ready to adjust its runoff of the balance sheet policy depending on the developments.
USD/CNY dropped 0.2 percent to 6.6874, with traders closely watching out for the upcoming China manufacturing PMI release set to be published on Thursday and the Caixin PMI report scheduled for release on Friday.
Meanwhile, AUD/USD pair exchanged hands near flat at 0.7187. The Australian dollar has recovered about 2 percent since the start of February, when it reached its monthly low of 0.7054 against the US dollar after the Reserve Bank of Australia hinted at possible interest rate cut.
The US dollar index, which gauges the greenback’s strength against a basket of six other major currencies, was 0.2 percent higher. The index fell overnight after Powell’s comments. However, it managed to cap downside momentum after the release of a more upbeat consumer confidence data.
The Conference Board’s consumer confidence metric increased to 131.4 in February, from 121.7 last month, topping economists’ forecast for a reading of 124.7.
Pound Reaches Highs on Brexit Development
Meanwhile, the pound catapulted to a 21-month high against the euro after Prime Minister Theresa May opened the door for a possibility of a delayed Brexit.
The pound gained 1.4 percent against the US dollar to a five-month high of $1.3284, closing in to its biggest daily gains versus the euro in almost two years.
May has told lawmakers that they could vote on March 14 on a motion requesting a “short, limited extension” to the scheduled March 29 Britain exit if on March 12 they reject the Brexit deal she reached with Brussels.
“For markets, the risk of a no-deal Brexit was already slim; now it’s almost vanished,” said a currency analyst. “There may be further gains for the pound because this increases the likelihood of May’s Brexit deal being accepted by pro-Brexit politicians who want to avoid delaying the process.”
