USD gains on Tuesday, all eyes on Powell’s testimony

Volatility is expected to be elevated today as yesterday’s relief rally in most assets seems to be fading. The dollar index gained 1.9% last week, its biggest weekly rise since March 2000, with investors taking some profits from this rally on Monday. 

However, the bullish pressure returned on Tuesday, with the USD rallying against its major peers, sending the EURUSD pair below 1.19 again. 

Precious metals came under selling pressure as the dollar gained and silver returned below 26 USD, while gold was trading near 1,775 USD.

Later in the day, the Federal Reserve Chair Jerome Powell is due to testify on the Fed’s emergency lending programs and current policies before the House Select Subcommittee on the Coronavirus Crisis. 

His prepared speech, already released late on Monday by the Fed, broadly confirmed what Powell said at his press conference last week. It looks like the central bank will announce the taper at the August Jackson Hole symposium, with the official process most likely starting in November/December.

We will see if the hawkish shift will derail the US stocks from their glorious bull market. But, so far, it looks like the last week’s dip is long forgotten, and equities remain resilient. 

Source: https://www.axiory.com/market-news/usd-gains-on-tuesday-all-eyes-on-powell-s-testimony