Major currency pairs continue to trade in familiar ranges midweek as investors’ search for the next catalyst continues.
Later in the day, 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.
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 data sent a pretty clear signal that the labour 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 Asian trading, 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.
NZDUSD 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.
EURUSD registered small losses on Tuesday, but managed to hold comfortably above 1.0800. Early Wednesday, the pair trades marginally higher at around 1.0820.
GBPUSD 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. XAUUSD struggles to gather bullish momentum on Wednesday but remains afloat above $2,370.
USDJPY 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.
(Source: OANDA)
