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During the weekend through mid-May, Bloomberg came out with a piece suggesting Federal Reserve Chairman Jerome Powell to keep his latest dovish outlook while appearing for a two-day testimony during this week.

Key quotes

Federal Reserve Chairman Jerome Powell will deliver a cautionary message about the U.S. economy and Covid-19 when he appears twice this week on Capitol Hill.

His remarks to lawmakers are widely expected to echo the mostly downbeat assessment he gave June 10 after policymakers held interest rates near zero at a two-day meeting and signaled they’d probably stay there through 2022.

His performance, which highlighted the hardships faced by millions of Americans who’ve lost work, drew criticism from a White House official for being overly negative.

‘I can’t see him straying from that message,’ said Jennifer Lee, a senior economist at BMO Capital Markets. ‘If he changes his tune in any way, people are going to be jumping all over it. Democrats will accuse him of bending to the political will of others.’

Powell will testify via video conference at 10 a.m. Washington time Tuesday before the Senate Banking Committee and at noon Wednesday to the House Financial Services Committee.

FX implications

The news keeps downside pressure on the markets at the week’s start as the AUD/USD pair remains depressed above 0.6800 amid the initial hours of trading in Asia.

  • Fed’s Kaplan: We’re going to get positive job growth in June, July and from here
  • AUD/USD: Depressed above 0.6800 ahead of China data

  • Forex Today: Risk aversion to keep leading the way

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