Investing.com – The steadied on Wednesday in Asia ahead of a speech by Federal Reserve Chairman Jerome Powell, who is due to appear before Congress on Wednesday and Thursday for his semiannual testimony.
The U.S. dollar index that tracks the greenback against a basket of other currencies was up 0.1% to 97.138 by 12:15 AM ET (04:15 GMT).
The U.S. currency received support this week as hopes that the Federal Reserve will ease monetary policy aggressively dampened following the release of a strong jobs report last week.
The Fed opened the door at its last policy meeting for a cut and was widely expected to cut rates by 25 basis points when it meets at the end of July. Expectations for a 50-basis point cut, however, have fallen to 5% from 25% last week after the latest jobs data showed the U.S. economy might be too strong to justify easing.
The pair slipped 0.1% to 1.2452. BlackRock (NYSE:) warned on Tuesday that traders are underestimating the impact of Brexit on the value of sterling over the next 12 months.
“It’s even more uncertain than it has been at any point in the process,” Harrison said. “You can imagine a very, very wide range of outcomes in the next 12 months, and currently the options markets in currencies are not reflecting the scale of that potential volatility,” BlackRock portfolio manager Rubert Harrison said at a mid-year investment update that was cited by Reuters.
“The cumulative impact of the uncertainty, as well as … all the stocking and destocking that we’ve seen, has definitely had a negative impact on momentum, which has become significantly more negative over the last three months or so,” he added.
Although not a directional driver, data today showed China’s Consumer Price Index in June rose 2.7% from a year earlier, in line with expectations.The country’s Producer Price Index in June was unchanged from a year earlier. Markets previously expected PPI to slow to 0.3%.
The Chinese yuan was little changed following the release of the data.
The pair last traded at 6.8859, up 0.1%.
The pair traded 0.1% higher to 108.88.
The pair and the pair both slipped 0.1%.
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