Summary:
- Powell delivers semiannual monetary policy report
- “Best policy is to keep gradually raising rates”
- USD looks to build on gains; USDJPY near 2018 peak
One of the most highly anticipated events for the US dollar this week was Powell’s speech this afternoon and the Fed chair has just delivered his opening statement in Washington. The speech contained no huge surprises with Powell being fairly steady and reiterating several remarks that have been heard before. Selected comments are as follows:
- Best policy is to keep gradually raising rates
- US economy has grown at a solid pace
- Q2 considerably stronger than Q1
- Risk to overall economy is roughly balanced
- Inflation on target with appropriate monetary policy
The statement is probably best summarised by the first comment above that the Fed believe the “best policy is to keep gradually raising rates” which may be seen to suggest that they will look to pursue a similar monetary policy going forward.
The US dollar was trading higher on the day before Powell’s speech and the buck remains well supported with only a handful of currencies out performing the greenback on the day. Source: xStation
Look at USD crosses the USDJPY has added to its recent gains this afternoon with the pair hitting its highest level since early January. This pair is also subject to our latest bank recommendation which can be found here.
USDJPY has seen its range expand lately with the pair hitting a 7-month high this afternoon. Source: xStation