Investing.com – The US dollar held steady in early trading Thursday in Europe and approached a one-month low after the first day of Federal Reserve Chairman Jerome Powell’s semi-annual appearance before Congress, while the pound lost ground pending the latest BoE meeting.
By 07:50 AM ET (0750 GMT), the currency index, which tracks the currency against a basket of six other major currencies, was up to 101.707, trading above its recent one-month low.
Mixed messages from the Fed
On Wednesday, the head of the Federal Reserve appeared before the Congressional House Financial Services Committee. It was the first day of his semi-annual briefing, and he stuck to his line, saying the More America Theory is a “very good guess” if the economy continues on its current path.
However, he has refused to commit to a July rate hike, as some had hoped, although his stance has been contradicted by other Fed members who have spoken of a prolonged pause in the central bank’s rate-raising cycle.
“The starting point is that we have to stay at this level for the rest of the year,” Atlanta Fed President Rafael Bostick said in an article published Thursday. “If we simply push for more rate hikes, we could unnecessarily dampen the momentum of the economy.”
Powell is scheduled to make more statements during the day Thursday, this time before the Senate Banking Committee.
The pound fell from the BoE meeting
Elsewhere, the pair fell 0.1% to 1.2756, not far from last week’s high of 1.2849, pending the latest UK monetary policy meeting.
Everything points to the Bank of England raising interest rates for the 13th consecutive time this Thursday, but the possibility of a sharp 50 basis point hike rose after the May interest rate settled at 8.7% on Wednesday, the highest among major economies.
The ECB must remain ‘adamant’
The pair fell to 1.0988, not far from its recent one-month highs, and ECB officials remain optimistic even after last week’s rate hike.
“For me, inflation is like a greedy beast and we have to fight it,” Bundesbank chief Joachim Nagel told a conference. “As inflation warriors, we have to be very stubborn because inflation is very stubborn.”
On the other hand, the risk-sensitive index fell 0.5% to 0.6762, weighed down by uncertainty surrounding China’s stimulus measures and demand for raw materials.
The pair fell 0.1% to 141.75 near 6-month lows as the Bank of Japan maintains loose monetary policy, while the rate remains steady at 7.1795 and oscillates around the CNY’s six-month minimum.
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