Dollar’s selloff extends in Asian session today, riding on the view of Fed’s rate cut in July is a done deal. Fed Chair Jerome Powell’s testimony to Congress was not decidedly dovish. But he did nothing that toned down market’s full pricing of July cut. Instead, he pointed to the continous uncertainties from trade tension and global slowdown. It seems now that continuation of uncertainties is already enough for an insurance rate, rather than manifested deterioration in outlook.

The tone was somewhat echoed by June FOMC minutes too. The minutes indicated that Fed’s monetary stance has moved to “risk management” with “several” of them believing a rate cut should be implemented to “cushion the effects of possible future adverse shocks”. Additionally, the minutes acknowledged that current financial conditions are “premised importantly on expectations that the Federal Reserve would ease policy in the near term to help offset the drag on economic growth stemming from uncertainties about the global outlook and other downside risks”.

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