- Powell says he doesn’t see a strong case for a policy move in either direction.
- US Dollar Index rebounds from two-week lows.
- 10-year US T-bond rises sharply during Powell’s press conference.
Following a drop toward the 111 handle with the initial reaction to the FOMC’s monetary policy statement, the USD/JPY pair reversed its direction in the last 30-minutes and gained more than 50 pips as Chairman Powell’s remarks helped the greenback gather strength. At the moment, the pair is up 0.16% on the day at 111.60.
Although the dollar came under a renewed bearish pressure after the FOMC kept its policy statement virtually unchanged in April and announced a cut to the IOER rate, Chairman Powell sounded relatively optimistic regarding the economic outlook and hurt the probability of a rate cut to help the currency gain traction.
Powell said risks abroad have eased slightly since the March meeting and added that they were expecting to observe healthy GDP growth in the remainder of the year. “We don’t see a strong case for a policy move in either direction,” Powell stated on the policy outlook. The US Dollar Index, which dropped to its lowest level since April 18 at 97.15 ahead of Powell’s press conference, was last up 0.2% on the day at 97.70.
Additionally, after losing nearly 2% earlier in the session, the yield on the 10-year Treasury Bond turned positive on the day with a decisive rebound and provided an additional lift to the strongly-correlated USD/JPY pair.
Technical levels to watch for
Share
