Attention Turns to the Weak U.S. Dollar and Fed Chair Powell’s Congressional Testimony

Attention May Turn to the Weak U.S. Dollar and Fed Chair Powell’s Congressional Testimony

15.07.2021

Yesterday, the three major U.S. stock indices posted mixed results, with stock prices remaining flat, interest rates falling, and the U.S. dollar weakening.Gold rose and is trading around $1,830. The fear index (VIX) fell back, dropping to 16.3. During his testimony before the U.S. Congress yesterday, Powell maintained his stance that “inflation is transitory” and remained cautious about transitioning to tapering.

In the foreign exchange market, the euro/yen pair is declining as its upside is capped by the 20-period moving average on the hourly chart.After peaking at 131.08 on Tuesday, the 13th, the pair fell to 129.89 during today’s Asian trading session, breaking below the key 130.00 level. If the decline continues, there is no support until around 129.6—this month’s low—so we should remain cautious about the possibility of further declines.

Today, at 21:30: U.S. Initial Jobless Claims, U.S. NY Fed Manufacturing Index, U.S. Philadelphia Fed Business Outlook Index, and U.S. Import Price Index; at 22:00: Canadian Existing Home Sales; at 22:15: U.S.Industrial Production and Capacity Utilization at 10:15 p.m., Fed Chair Powell’s Congressional Testimony at 10:30 p.m., and remarks by Chicago Fed President Evans at midnight. We’ll be closely monitoring these events to see if they help determine the direction of the U.S. dollar, which is currently the focus of attention.