Market focus in the New York session yesterday was directed to Federal Reserve (Fed) Chairman Jerome Powell's testimony before the United States (US) Congress after delivering the semi-annual monetary policy report.
Investors paid close attention to Powell's remarks in search of the latest indication of the Fed's monetary policy direction.
In a cautious tone, Powell seemed to be preparing to move to policy easing when he stated that the act of keeping interest rates high for too long could have a negative impact on economic growth.
However, he still maintained his previous view of the risk of implementing interest rate cuts at the wrong time.
According to Powell, the latest data still does not give strong confidence for a change in their monetary policy.
It is not until inflation is heading towards target and the latest leading data after this provides great confidence that the Fed will consider cutting interest rates.
Powell is aware that they face risks from two directions, namely the risk of keeping interest rates high for too long and the risk of lowering interest rates too early.
Too much and too much policy easing could affect the pace of inflation towards the central bank's 2% target, while slow easing could further weaken the economy.
In conclusion, investors still do not get an indication of the time for the implementation of interest rate cut measures from Powell.
Thus, as long as there will be purchases of US dollars in the market that will support the increase in the value of the currency.
The next indicator will be assessed through the release of US inflation data on Thursday with the expectation that there will be a decrease in the data for June.
