Dollar Traded Largely Unchanged on Thursday Morning

Dollar banknotes

The U.S. dollar traded largely unchanged in Europe on early Thursday, stabilizing after Wednesday’s weakness following Fed Chair Jerome Powell’s speech in Congress. Powell insisted that it was too soon to withdraw the Federal Reserve’s monetary support for the economy. At 2 AM ET, the dollar index, which tracks the U.S. currency against a basket of six currencies, traded marginally lower at 92.350.

The USD/JPY fell 0.1% to 109.88. The EUR/USD was slightly lower at 1.1832, having climbed from close to its three-month low of 1.1772. The GBP/USD suffer minor losses and fell to 1.3851. The risk-sensitive AUD/USD dropped 0.2% to 0.7463.

Elsewhere, the USD/CNY fell 0.1% to 6.4617 after China’s economy failed to meet the expectations in the second quarter. The gross domestic product (GDP) rose 7.9% year on year.

The USD/CAD gained 0.2% to 1.2532. The U.S. dollar rose against the Canadian dollar the day after the Bank of Canada dialed back its bond-buying program. The country’s central bank stated that it would cut its weekly net purchases of government bonds to a target of C$2 billion ($1.6 billion) from C$3 billion.

The USD/TRY was largely unchanged at 8.5809 after the Turkish lira strengthened on Thursday, thanks to the central bank. The Central Bank of the Republic of Turkey (TCMB) kept its benchmark interest rate unchanged for a fourth month. The TCMB also largely ruled out a cut in the summer, warning of “possible volatility” in inflation as the economy reopens.

Dollar and Jerome Powell

Soaring U.S. inflation, with consumer prices increasing by 5.4 last month and producer prices by 7.3%, prompted FOMC members to suggest the time was coming for the Fed to change its huge bond-buying program. But, Fed chair Jerome Powell does not agree with people who think that the bank must change its position. Powell told lawmakers that it would be a mistake to change the central bank’s monetary policy.

The Federal Reserve chair returns to Capitol Hill later on Thursday for further testimony. Traders will be looking to see if Powell moderates his language over tapering at all. Ahead of Powell’s latest appearance comes the release of the weekly jobless claims data. Thanks to jobless claims data, it is possible to learn more about the U.S. labor market. The state of the market is important for the Federal Reserve, given the market is still 7.5 million jobs short of its level before the pandemic.

  • Support
  • Platform
  • Spreads
  • Trading Instument

For more news updates, visit our homepage now and see our latest news article. Want to learn more about trading? Visit our education page now and learn for FREE!


Leave a Reply