Breaking News: USD tumbles down on Powell's hesitant comments

Yohay Elam FXStreet

Fed Chair Jerome Powell said the there is no sign of an overheating of the economy and that there is no clear sign inflation is accelerating beyond the Fed's target. The economy is doing well, but not going wild, is the general message.

In addition, Powell adds conditionality to the current path of rate hikes. He says (emphasis added:

if the strong growth in income and jobs continues, further gradual increase in the target range for the federal funds rate will likely be appropriate

The conditionality, borrowing a page from ECB President Mario Draghi, shows some hesitance.

The Fed Chair said real wages have grown slowly for medium and low-income workers in recent decades. He did repeat some optimistic comments such as that there is a good reason to believe that the strong growth will continue. While the September rate hike is not in danger, Powell is less hawkish than usual. Under his leadership, the Fed has been more hawkish than under his predecessor Janet Yellen.

The US Dollar is falling.across the board. The EUR/USD reached a peak of 1.1639, the GBP/USD hit a high of 1.2881, and the USD/JPY slipped into negative territory for the day.

More: Is the US economy peaking out? Too many indicators are going in the wrong direction

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

GBP/USD weakens to two-week lows near 1.3520

GBP/USD trades on the back foot, returning to the low 1.3500s, or two-week troughs, on Tuesday. Cable’s bearish price action follows decent gains in the Greenback at the time when investors assess latest US data releases and the persistent uncertainty in the US-Iran crisis.

EUR/USD remains offered; breaks below 1.1600

EUR/USD now accelerates its daily correction, breaching below the key 1.1600 support level on Tuesday. The pair’s daily correction comes on the back of a decent bounce in the US Dollar despite disappointing US data releases and amid persistent geopolitical concerns.

Gold eyes $4,300 breakdown amid Fed hike bets, Iran risks, firm USD

Gold languishes near a two-and-a-half-week low, touched during the Asian session on Wednesday, awaiting a break below $4,300 before the next leg down. Escalating US-Iran tensions lift oil prices to a nearly six-week high and fuel inflation fears, reaffirming Fed rate-hike bets. This acts as a tailwind for the safe-haven US Dollar and undermines demand for the non-yielding bullion.

WTI advances to mid-$90.00s, fresh high since July 24 amid escalating US-Iran tensions

West Texas Intermediate (WTI) – the benchmark US Crude Oil price – scales higher for the third straight day – also marking the fifth day of a positive move in the previous six – and climbs to a fresh high since July 24 during the Asian session on Wednesday.

Middle East war takes its toll on Gold prices

The US Dollar accelerates its advance against the precious metal in the American session on Tuesday, following news indicating United States forces launched attacks on Islamic Revolutionary Guard Corps targets in Iran, as reported by the US Central Command. Explosions were reported on Qeshm Island, around the Strait of Hormuz, and across southern Iran.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.