- Fed Chief Congress Testimony Moves Dollar Lower
- Another Advance for Euro
- Recession Possibility Hampers Stocks
The US Dollar forex market moved lower on Wednesday as Fed Chief Jerome Powell delivered his testimony to congress. His comments about the ongoing inflation problem and how it would be addressed seem to have won favor in the market with some moving from their ultra-cautious positions. The Euro is one counterpart currency that took advantage of the USD move lower on Wednesday with another positive day for the common currency. Meanwhile, on Wall Street, the major averages were all slightly lower as the market remains concerned about a recession that analysts are predicting as an increasingly likely event.
Fed Stays Committed to Battling Inflation
The testimony of Federal Reserve Chief Jerome Powell was closely eyed today by those trading forex and in the wider market. The Fed Chief has recently come in for some criticism about the way inflation has been handled in regard to monetary policy with too much stimulus and slower than required action to tackle to issue being blamed. Transitory being the phrase that provokes many to point at a Fed misstep on the issue.
In his testimony, Powell commented that the Fed remains committed to bringing inflation back down to the target level. If this requires further interest rate hikes then there seems to be support from Powell and the Central Bank policymaker to do so. This is the case even if such a rate hike induces a recession.
Euro Continues Move Higher
At forex brokers, one beneficiary of the move back toward slight weakness in the USD on Wednesday was the Euro. The common currency gained ground for the third consecutive day in what has been a very challenging period for the currency and region. The EUR/USD attracted buyers at certain points of the day but still finished up below 1.06 which could be a key psychological benchmark for traders. The data coming from the bloc may be hampering further upside in the currency.
The EU released some data which has disappointed analysts moving into the second half of the week. These figures include a June Consumer Confidence preview which comes in below expectations and also below the previous months figures. The June figures look like moving down by -23.6 while the prior months figure was -21.2
Stocks Lower But Futures More Positive
On Wall Street, it was a slow trading day for the major markets, but one on which they again moved slightly lower. All three of the major indices in the US lost about 0.15% during the regular trading session as traders come to grips with a recession looking ever more likely.
The trading after the bell though was more positive. This could indicate a move higher coming toward the end of the week, though trading in the markets has been unpredictable and choppy at best in recent weeks, with the general trend continuing lower.