Dollar remains generally weak but selloff in so far rather limited except versus Yen. Fed Chair Jerome Powell didn’t sound particular dovish at the Congressional testimony. Yet, he basically did nothing to alter market expectations of a 25bps rate cut by Fed in July. That’s generally taken as a nod to the cut.
Among the Q&As, there’s one thing that’s rather important. Asked if June’s stronger than expected job report had changed Fed’s thinking, Powell bluntly said “a straight answer to your question is, no.” But then, Powell still sounded non-committal to any move in interest rates. But he pointed to the upcoming data including CPI this week, retail sales next week, and Q2 GDP the week after. All these data will be taken in to considerations at the next FOMC meeting.
In the stock markets, DOW hit as high as 26983.45 earlier today but pared back much gains to 26860, up only 0.29%. S&P 500 also breached 3000 handle for the first time ever but it’s now back below 2985.
Focus in USD/JPY is now back on 108.28 minor support. Break there will indicate failure to sustain above 108.80 resistance, and completion of rebound from 106.78. Deeper fall would then be seen back to 107.53 support and then 106.78 low.