Forex Today: Eyes on second round of Powell testimony, Fedspeak
Here
is
what
you
need
to
know
on
Wednesday,
July
10:
Major
currency
pairs
continue
to
trade
in
familiar
ranges
midweek
as
investors’
search
for
the
next
catalyst
continues.
Later
in
the
day,
Federal
Reserve
(Fed)
Chairman
Jerome
Powell
will
deliver
the
Semi-Annual
Monetary
Policy
Report
and
respond
to
questions
before
the
House
Financial
Services
Committee
in
the
second
day
of
his
Congressional
testimony.
Several
other
Fed
policymakers
will
also
be
delivering
speeches
during
the
American
trading
hours.
US
Dollar
PRICE
This
week
The
table
below
shows
the
percentage
change
of
US
Dollar
(USD)
against
listed
major
currencies
this
week.
US
Dollar
was
the
strongest
against
the
New
Zealand
Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.17% | 0.14% | 0.39% | -0.10% | 0.04% | 0.74% | 0.12% | |
| EUR | -0.17% | 0.18% | 0.54% | 0.05% | 0.03% | 0.92% | 0.30% | |
| GBP | -0.14% | -0.18% | 0.33% | -0.11% | -0.15% | 0.74% | 0.11% | |
| JPY | -0.39% | -0.54% | -0.33% | -0.49% | -0.34% | 0.50% | -0.22% | |
| CAD | 0.10% | -0.05% | 0.11% | 0.49% | 0.09% | 0.84% | 0.23% | |
| AUD | -0.04% | -0.03% | 0.15% | 0.34% | -0.09% | 0.89% | 0.25% | |
| NZD | -0.74% | -0.92% | -0.74% | -0.50% | -0.84% | -0.89% | -0.63% | |
| CHF | -0.12% | -0.30% | -0.11% | 0.22% | -0.23% | -0.25% | 0.63% |
The
heat
map
shows
percentage
changes
of
major
currencies
against
each
other.
The
base
currency
is
picked
from
the
left
column,
while
the
quote
currency
is
picked
from
the
top
row.
For
example,
if
you
pick
the
US
Dollar
from
the
left
column
and
move
along
the
horizontal
line
to
the
Japanese
Yen,
the
percentage
change
displayed
in
the
box
will
represent
USD
(base)/JPY
(quote).
In
his
prepared
remarks,
Powell
told
the
Senate
Banking
Committee
on
Tuesday
that
more
good
data
would
strengthen
their
confidence
on
inflation,
repeating
that
it
will
not
be
appropriate
to
reduce
the
policy
rate
until
they
have
more
confidence.
Commenting
on
the
latest
jobs
report, “the
most
recent
labor
market
data
sent
a
pretty
clear
signal
that
the
labor
market
has
cooled
considerably,”
he
noted.
These
remarks
failed
to
trigger
a
noticeable
market
reaction.
The
US
Dollar
Index
closed
with
marginal
gains,
while
major
equity
indexes
in
the
US
ended
the
day
little
changed.
During
the
Asian
trading
hours,
the
data
from
China
showed
that
the
Consumer
Price
Index
declined
by
0.2%
on
a
monthly
basis
in
June,
bringing
the
annual
CPI
inflation
rate
down
to
0.2%
from
0.3%
in
May.
In
the
meantime,
the
Reserve
Bank
of
New
Zealand
announced
that
it
left
the
policy
rate
unchanged
at
5.5%
as
widely
expected.
The
RBNZ
said
in
its
policy
statement
that
there
are
signs
suggesting
that
inflation
persistence
will
ease
in
line
with
the
fall
in
capacity
pressures
and
business
pricing
intentions.
NZD/USD
turned
south
following
this
event
and
was
last
seen
trading
below
0.6100,
where
it
was
down
more
than
0.5%
on
a
daily
basis.
EUR/USD
registered
small
losses
on
Tuesday
but
managed
to
hold
comfortably
above
1.0800.
Early
Wednesday,
the
pair
trades
marginally
higher
on
the
day
at
around
1.0820.
GBP/USD
edged
lower
on
Tuesday
and
ended
the
day
below
1.2800.
The
pair
clings
to
small
gains
near
this
level
in
the
European
morning.
Following
Monday’s
sharp
decline,
Gold
staged
a
technical
correction
and
posted
small
gains
on
Tuesday.
XAU/USD
struggles
to
gather
bullish
momentum
on
Wednesday
but
remains
afloat
above
$2,370.
USD/JPY
edged
higher
after
finding
support
near
161.00
and
closed
in
positive
territory
on
Tuesday.
The
pair
holds
its
ground
to
start
the
European
session
and
trades
at
around
161.50.
Fed
FAQs
Monetary
policy
in
the
US
is
shaped
by
the
Federal
Reserve
(Fed).
The
Fed
has
two
mandates:
to
achieve
price
stability
and
foster
full
employment.
Its
primary
tool
to
achieve
these
goals
is
by
adjusting
interest
rates.
When
prices
are
rising
too
quickly
and
inflation
is
above
the
Fed’s
2%
target,
it
raises
interest
rates,
increasing
borrowing
costs
throughout
the
economy.
This
results
in
a
stronger
US
Dollar
(USD)
as
it
makes
the
US
a
more
attractive
place
for
international
investors
to
park
their
money.
When
inflation
falls
below
2%
or
the
Unemployment
Rate
is
too
high,
the
Fed
may
lower
interest
rates
to
encourage
borrowing,
which
weighs
on
the
Greenback.
The
Federal
Reserve
(Fed)
holds
eight
policy
meetings
a
year,
where
the
Federal
Open
Market
Committee
(FOMC)
assesses
economic
conditions
and
makes
monetary
policy
decisions.
The
FOMC
is
attended
by
twelve
Fed
officials
–
the
seven
members
of
the
Board
of
Governors,
the
president
of
the
Federal
Reserve
Bank
of
New
York,
and
four
of
the
remaining
eleven
regional
Reserve
Bank
presidents,
who
serve
one-year
terms
on
a
rotating
basis.
In
extreme
situations,
the
Federal
Reserve
may
resort
to
a
policy
named
Quantitative
Easing
(QE).
QE
is
the
process
by
which
the
Fed
substantially
increases
the
flow
of
credit
in
a
stuck
financial
system.
It
is
a
non-standard
policy
measure
used
during
crises
or
when
inflation
is
extremely
low.
It
was
the
Fed’s
weapon
of
choice
during
the
Great
Financial
Crisis
in
2008.
It
involves
the
Fed
printing
more
Dollars
and
using
them
to
buy
high
grade
bonds
from
financial
institutions.
QE
usually
weakens
the
US
Dollar.
Quantitative
tightening
(QT)
is
the
reverse
process
of
QE,
whereby
the
Federal
Reserve
stops
buying
bonds
from
financial
institutions
and
does
not
reinvest
the
principal
from
the
bonds
it
holds
maturing,
to
purchase
new
bonds.
It
is
usually
positive
for
the
value
of
the
US
Dollar.
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