The U.S. Dollar is flat as markets wait for the much-anticipated testimony to Congress by Federal Reserve Chairman Jerome Powell.
His views will provide clearer guidance to the U.S. Dollar and to domestic business leaders trying to prepare for a more accommodative environment with lower interest rates. Stocks worldwide for the moment are also frigid as the S&P 500 Index looks headed downward while on the other side of the Atlantic the Stoxx 600 fell for a fourth straight session.
At the time of writing, news broke of Powell’s prepared statements and their negative nature caused a crash for the greenback, which fell by half a percent against its major counterparts immediately. Powell sees the second quarter as one of worry because of business investment that “has slowed notably.” Additionally, he says that June only ratified the Federal Open Market committee’s assessment of a dovish outlook on the economy. Further reaction expected as he speaks at 10AM.
What to Watch Today…
- Powell Speaks to Congress 10AM
- FOMC Minutes 2PM
Complete Economic Calendar can be found here.
The Euro received a surprise boost this morning as markets learned of Fed head Jerome Powell’s pessimistic planned discourse with Congress. While the Euro-bloc as a whole has looked somewhat stagnant and headed towards the negative territory, Greece has been an example of progress.
Overcoming its debt obligations while staying on a re-payment program helped make the system look competent at stabilizing a member country, but also changes to leadership within Greece seem to be good news to EU businesses. Newly elected Prime Minister Kyriakos Mitsotakis is expected to be friendlier towards private enterprises and banking than his predecessor Alexis Tsipras. Furthermore, the Euro-bloc might add a new member as Croatia officially applied to be included in the monetary union and retire the Kuna.
The Pound is trying to get away from its lowest levels in over two years and is now being helped by improvements in economic data. Although Industrial and Manufacturing Production expansions did not meet expectations, the Gross Domestic Product for the month and quarter did show a jump of 0.3%, a particularly good surprise since economists expected the month of May to show a contraction of (-0.4%).
We shall see if this climb for Sterling is only temporary since the political situation in the U.K. is a bigger fish to fry. Boris Johnson holds the most chips on the table currently to have a victorious outcome in the race for Prime Minister.