Investing.com - The U.S. dollar stabilized in early European trade Thursday near a one-month low after the first day of Federal Reserve Chair Jerome Powell’s semi-annual testimony to Congress, while sterling edges lower ahead of the latest Bank of England meeting.
At 01:50 ET (05:50 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, edged higher to 101.707, trading just above its recent one-month low.
Federal Reserve Chair Jerome Powell appeared before the House Financial Services Committee of Congress on Wednesday. This was the first day of his two-day semi-annual testimony, and he stayed on message, stating further U.S. rate increases are "a pretty good guess" if the economy continues in its current direction.
However, he declined to commit to a rate hike in July, like some had expected, while his stance was contradicted by other Fed members calling for an extended pause in the central bank’s rate hike cycle.
“My baseline is that we should stay at this level for the rest of the year," said Atlanta Federal Reserve President Raphael Bostic, in a published essay earlier in the day. “If we simply press on with additional rate hikes, we could needlessly drain too much momentum from the economy."
Powell is set to speak again later Thursday, this time to the Senate Banking Committee.
Elsewhere, GBP/USD fell 0.1% to 1.2756, not far from last week’s one-year high of 1.2849, ahead of the latest policy-setting meeting of the Bank of England.
The U.K. central bank is widely expected to raise interest rates for a 13th time in a row later Thursday, but the chances of a hefty 50-basis-point hike were lifted after the country’s May headline inflation index held at 8.7% on Wednesday, the highest of any major economy.
EUR/USD edged lower to 1.0988, not far removed from the recent one-month high, with European Central Bank officials maintaining a hawkish stance even after the central bank lifted interest rates last week.
"Inflation to me is like a greedy beast and we do have to fight against this very greedy beast," Bundesbank chief Joachim Nagel told a conference. "As inflation fighters we have to be very stubborn because inflation is so stubborn."
Elsewhere, the risk-sensitive AUD/USD fell 0.5% to 0.6762, with the Aussie dollar coming under pressure from uncertainty over Chinese stimulus measures and commodity demand.
USD/JPY dropped 0.1% to 141.75, with the Japanese yen trading close to six-month lows as the Bank of Japan maintains a loose monetary policy, while USD/CNY traded flat at 7.1795, with the Chinese yuan hovering close to six-month lows.
Begin trading today! Create an account by completing our form
At One Financial Markets we are committed to safeguarding your privacy.
Please see our Privacy Policy for details about what information is collected from you and why it is collected. We do not sell your information or use it other than as described in the Policy.
Please note that it is in our legitimate business interest to send you certain marketing emails from time to time. However, if you would prefer not to receive these you can opt-out by ticking the box below.
Alternatively, you can use the unsubscribe link at the bottom of the Demo account confirmation email or any subsequent emails we send.
By completing the form and downloading the platform you agree with the use of your personal information as detailed in the Policy.