News Tech: The US dollar hovered near the middle of its recent range against its major currencies on Tuesday, as traders looked ahead to outgoing Fed Chair Jerome Powell’s nomination hearing later in the day to add new clues about the timing and pace of policy normalization. In his prepared opening remarks, released Monday, Powell will pledge to keep inflation high, but make no mention of plans for the monetary policy line. However, he will answer questions from senators in the bid for a second four-year term. The dollar index, which measures the currency against six others, hovered around 95.93 in the early Asian session.
“Confirmation of March tightening and early QT should support overall USD firmness, albeit within a well-established range,” they wrote in a research note. TD is expecting a first bull run in June, but as early as March, it is also likely. Money markets are priced once in May, and twice in November. US consumer inflation data for December is due out on Wednesday, with headline CPI expected to come in at 7% y/y, reinforcing the case for an uptick in inflation rates. fast. The dollar was little changed at 115.23 yen after rebounding from a one-week low of 115.045 overnight.
It hit a more than 16-month high of 96,938 on Nov. 24 amid growing heat among Fed policymakers but has since been stuck between that level and 95,544, reaching less than a week later, although the rhetoric continues to build Wall Street banks are planning a four-quarter point rate hike. TD Securities strategists said it appears the Fed is in the “as soon as possible” mindset for rate hikes and withdrawal from its balance sheet following the end of its bond-buying stimulus – one process known as quantitative tightening (QT).
The euro was mostly flat at $1.13325, stuck in the middle of its trading range since mid-November. The British pound was steady at $1.35825 after falling from all-time highs. for two months on Monday is $1,36025. The Australian dollar rose 0.17% to $0.71860, supported by local retail sales data that was much higher than economists’ forecasts.