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Market comments on behalf of Wael Makarem Financial Markets Strategists Lead at Exness
(MENAFN- Your Mind Media ) 10th July 2024
The US dollar has stabilised after small gains this week and remained below the key level of 105 points, near its five-week low. The market could remain cautious ahead of the second day of testimony of Federal Reserve Chair Jerome Powell before Congress. His words could fuel some volatility in the markets as traders continue to look for clues regarding the next steps in monetary policy. During his comments yesterday, Powell recently emphasised that any upcoming adjustments to interest rates would depend on the Fed becoming more confident that inflation will reach its 2% target. Powell’s remarks tempered expectations for an imminent rate cut to a certain extent, although they remain elevated for September when monetary policy is expected to start softening. Treasury yields also remained stable to a certain extent but could be exposed to the downside if Powell’s comments today are viewed as dovish. Attention could later turn to the release of inflation data tomorrow. The data could strongly affect the strength of the dollar and the direction of yields. While core inflation is expected to remain unchanged a surprise could drive an increase in volatility where a decline in core inflation could pull treasury yields and the dollar to the downside.
The US dollar has stabilised after small gains this week and remained below the key level of 105 points, near its five-week low. The market could remain cautious ahead of the second day of testimony of Federal Reserve Chair Jerome Powell before Congress. His words could fuel some volatility in the markets as traders continue to look for clues regarding the next steps in monetary policy. During his comments yesterday, Powell recently emphasised that any upcoming adjustments to interest rates would depend on the Fed becoming more confident that inflation will reach its 2% target. Powell’s remarks tempered expectations for an imminent rate cut to a certain extent, although they remain elevated for September when monetary policy is expected to start softening. Treasury yields also remained stable to a certain extent but could be exposed to the downside if Powell’s comments today are viewed as dovish. Attention could later turn to the release of inflation data tomorrow. The data could strongly affect the strength of the dollar and the direction of yields. While core inflation is expected to remain unchanged a surprise could drive an increase in volatility where a decline in core inflation could pull treasury yields and the dollar to the downside.
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