- US Dollar Index retraces this week’s gains on FOMC Chairman Powell’s remarks.
- Powell acknowledges risks of persistent weak inflation.
- NZD/USD gains traction and looks to snap 5-day losing streak.
The NZD/USD pair, which slumped to its lowest level in two weeks at 0.6568 earlier today, reversed its direction in the last hour and climbed to a fresh session high of 0.6653. As of writing, the pair was trading at 0.6644, adding 0.63% on a daily basis.
In his prepared remarks that will be delivered before the Congress at 14 GMT and was published by the Fed ahead of that event, FOMC Chairman Powell said that there was a risk that weak inflation will be even more persistent than the Fed currently expects and reiterated that the Fed will act ‘as appropriate’ to sustain the economic expansion.
With the knee-jerk reaction to these comments, the US Dollar Index slumped to a daily low of 96.10 to reflect the broad-based selling pressure surrounding the greenback. At the moment, the DXY is erasing 0.38% on the day at 97.13.
After Powell’s testimony, the FOMC will release the minutes of its June meeting as well and the greenback’s market valuation is likely to continue to drive the pair’s price action.
Technical levels to watch for
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