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U.S. Dollar Gains After Powell’s Comments; Yuan Also Up Ahead of PMI Data

2/27/2019, 2:53:46 PMBasics of Trading
U.S. Dollar Gains After Powell’s Comments; Yuan Also Up Ahead of PMI Data

U.S. dollar gained on Wednesday in Asia after Federal Reserve Chairman Jerome Powell delivered an upbeat assessment of the economy, though he did acknowledge there were some headwinds.

In the first of a two-day Congressional address at the Senate Committee on Banking, Powell said the central bank is in “no rush to make a judgement” about further changes to interest rates, but noted the Fed was prepared to adjust its runoff of the balance sheet policy as necessary.

The U.S. dollar index that tracks the greenback against a basket of other currencies last traded at 96.005 by 12:50 AM ET (05:50 GMT), up 0.2%. The index slipped overnight after Powell’s comments, but the better-than-expected U.S. consumer confidence data limited downside momentum in the greenback.

The Conference Board’s consumer confidence gauge rose to 131.4 in February, from 121.7 last month, beating economists’ forecast for a reading of 124.7.

Meanwhile, the USD/CNY pair lost 0.2% to 6.6874. Traders will be keep a close eye on the upcoming China manufacturing PMI release that is due on Thursday and the Caixin PMI report due on Friday.

The AUD/USD pair traded near flat at 0.7187. The Aussie has rebounded about 2% since the beginning of February, when the Australian currency hit its monthly low of 0.7054 against the U.S. dollar after the Reserve Bank of Australia opened the door for an interest rate cut.

Elsewhere, the GBP/USD slipped 0.1% to 1.3242. The pair received some support and rose to a five-month high in the previous session after U.K. Prime Minister Theresa May provided British lawmakers an option to delay Brexit. The pound later saw pullback from its daily high however, as analysts said the lack of other major catalysts pushed traders toward profit taking.