Forex Today: Will Powell power up markets and pummel the dollar? Coronavirus, geopolitics weigh

Here is what you need to know on Wednesday, May 13:

The market mood is mixed with stocks stabilizing after Tuesday's decline, while the dollar is marginally lower against most currencies with the exception of the New Zealand dollar, that suffered from a dovish rate decision. Jerome Powell, Chairman of the Federal Reserve, stands out.

Risk-off: The US Senate is advancing a bill to punish China over coronavirus. Lindsey Graham, a Republican Senator, accused China of deception over the virus. The world's largest economies are at loggerheads. 

The US warning: Another adverse factor is the warning by Dr. Anthony Fauci. The White House's medic warned of many deaths and sufferings if the US economy opens early. The University of Washington foresees 147,000 US coronavirus deaths by August. It currently stands at around 80,000.

Hope? On the other hand, Gilead Sciences announced it will ramp up production of Remdesivir, a drug that has shown to help COVID-19 patients. Two Japanese drugs, Avigan and Camostat, are also eyed. 

Powell: The Fed Chair will speak ahead of the US market open and will likely comment on negative rates – prospect markets priced last week and that President Donald Trump wants. So far, officials have rejected the idea that has been controversial in Japan and in the eurozone. He may also comment on falling US inflation. Other topics include potentially more monetary and fiscal support to the economy. Reiterating his commitment to do whatever is needed could boost stocks and weigh on the dollar. 

Fears of second waves: Shulan, a city in China's northern Jilin province has declared a wartime control mode amid a cluster of new cases. In Germany, the virus' Reproduction rate (R) dipped below 1, an encouraging sign, but it is stubbornly high in several regions, prompting speculation of reimposing lockdowns. 

The New Zealand dollar has been hit hard by the Reserve Bank of New Zealand's decision to expand its bond-buying scheme, a move that surprised markets.

GBP/USD is trying to recover after a slide below 1.23 on Tuesday. The government wants to restart the real-estate market and considers new taxes to fill its dwindling coffers, after extending its furlough program – supporting people who are unable to work. The deficit is set to leap to £337 billion this year. Gross Domestic Product figures for the first quarter are set to show the worst contraction since the financial crisis.

See UK GDP Preview: How calamitous was the initial coronavirus carnage? Three scenarios for GBP/USD

Eurozone: Industrial output figures and further coronavirus statistics are eyed to see if the recent baby steps to lift lockdowns have triggered an increase in the infections. EUR/USD remains stable. 

Cryptocurrencies have been moving higher, with Bitcoin hovering around $9,000 as analysts digest the results of the Bitcoin halving. 

More: Move fast and leverage trades, what to buy low and what to sell high – Interview with Steve Ruffley