USD 'barely flinches' to ceasefire break reports, GDP not expected to 'rock the boat'
|Reports of a breaking of the ceasefire between Israel and Iran should, in theory, have been bullish for the safe-haven dollar. Yet, the greenback barely flinched as market participants seemingly believe that the truce will hold, and the US Dollar Index remained pinned around its lowest levels in more than three years.
Chair of the Federal Reserve Jerome Powell testified before the US House panel on Tuesday. His remarks stressed a “careful and cautious” approach to rate cuts, as he continued to describe the economy as “solid”, while indicating to markets that he was not in favour of a cut until the autumn.
Interestingly, a couple of officials (Waller and Bowman) have voiced support for a July cut this week, but as these are two of the more dovish members of the FOMC, we do not think that their view is shared by the majority of the committee. Chair Powell will continue his testimony this afternoon, but he is unlikely to add anything groundbreaking.
Revised GDP figures on Thursday probably won’t rock the boat, with focus to instead be on the more timely durable goods orders and pending home sales for May. Friday will also see the release of the latest PCE inflation figures - the Fed’s preferred measure of consumer price growth.
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