Powell is scheduled to appear before the U.S. House of Representatives Financial Services Committee at 10 a.m. EDT (1400 GMT). This is as part of Powell semi-annual monetary policy testimony to Congress.
Four hours later, the Fed is due to release the minutes from its last policy meeting. The minutes should show the extent to which the thinking at the FED shifted in the days after Trump’s Mexico tariff threats.
The U.S. Federal Reserve over the course of its history has changed monetary policy in reaction to property crashes, war, financial bubbles. But the U.S. central bank is now getting prepared for its first policy shift triggered by tweets.
In the Fed’s monetary policy report issued last week ahead of Powell testimony, the trade war received its own analysis. Experts read this as a sign of the attention it is getting within the central bank.
US-China Trade war update
U.S. and Chinese trade officials were on phone in a further effort to resolve outstanding trade disputes between the countries. This marked a new round of talks after the world’s two largest economies agreed to a truce in a year-long trade war. The United States and China agreed during a Group of 20 nations summit in Japan last month to resume discussions. Also, they agreed to suspend a new round of tariffs on $300 billion worth of imported Chinese consumer goods. Trade talks stalled in May after China backed away from commitments it had made to secure legal changes to its system.
However, it is still not clear whether the two sides would resume work from the draft text agreed before that pull-back. Washington wants Beijing to address what U.S. officials see as decades of unfair and illegal trading practices. What is mote, it is unclear that the two sides’ differences have narrowed, even as the talks resume.
START TRADINGForex – Eyes on Powell
A broad index that tracks the US Dollar’s performance against six other major was at 97.503. It touched 97.588 in the previous session, which was the highest since June 19. Expectations of easier monetary policy later this month, pushed U.S. Treasury yields and the greenback higher. Analysts said the dollar should benefit if Powell’s comments on the U.S. economy are perceived as neutral or even slightly hawkish.
Sterling was little changed at $1.2466, close to $1.2439, the lowest it’s been since April 2017. Sterling held near its lowest level for more than two years on Wednesday as better-than-expected readings on the British economy did little to lift the gloom. Against the euro, the pound was on track for a 10th consecutive week of losses, dropping 0.1% to 89.95 pence.
The euro held near a three-week low against the dollar as investors trimmed expectations of aggressive rate cuts from the U.S. FED. The common currency was last flat at $1.1211, not far from the $1.1194 low. It lost 1.3% of value against the greenback in the past couple of weeks.
Oil prices rose more than 2% on Wednesday after industry data showed U.S. inventories fell more than expected. Besides, major U.S. producers evacuated rigs in the Gulf of Mexico before a storm.
U.S. West Texas Intermediate (WTI) crude futures Clc1 climbed $1.28 to $59.11 by 1136 GMT, after hitting a session high of $59.31. Brent crude futures LCOc1 were up $1.42 at $65.58, but below a session high of $65.69.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money