Dollar Index Extends Losses Ahead of Powell’s Testimony


The dollar index which measures the greenback against a basket of major currencies extended losses falling to 89.94, the lowest in six weeks, ahead of Powell's testimony. The Federal Reserve Chairman Jerome Powell will be testifying before the Senate Banking Committee on the monetary policy. Recently, he highlighted that the Federal Reserve will tack unemployment with an accommodative policy even if an overshoot in inflation takes place. Market participants are looking forward to the Fed's opinion on the current rally in Treasury yields, and whether they will adopt any yield curve control measures in a much direct way. The EURUSD rallied to $1.2177, and the GBPUSD rose to $1.4084, the highest since early 2018.


Major US stock index futures inched higher during the Asian session as investors anticipate Powell's testimony. They are expecting that Powell will reiterate the Fed's dedication to putting the economy back on the right track, and focusing on fighting unemployment with the necessary tools, which would ensure proper support to equities. On the other hand, the Coronavirus cases continued the drop, raising the chances of life going back to normal in a sooner manner. The Dow Jones Industrial Average futures rose to 31669, the S&P500 futures inched higher to 3895, and Nasdaq futures recovered to 13333.


Precious metals prices raced higher as the dollar weakened and Treasury yields held steady ahead of Powell's testimony. A dovish approach would support the bulls. The price of a gold ounce rose to $1816, the price of a silver ounce hit a three-week high of $28.32, platinum held steady near $1250, and palladium futures hovered around $2400.


Oil prices extended upside rally, hitting their highest level since early January 2020. The optimism over the rebound in economic activity as COVID19 cases drop globally pushed the prices higher, along with the producers' compliance to their output cuts. The West Texas Intermediate Crude April delivery rallied to $62.97, and Brent Blend April contract advanced to $66.76.

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Fed Chair Powell Testifies 





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