Mr Powell asserted: “Congress chose to insulate the Fed this way because it had seen the damage that often arises when policy bends to short-term political interest.” The US dollar also benefited from a decline in risk appetite. Pound traders, meanwhile, are bracing for a speech by the Governor of the Bank of England, Mark Carney. Any dovish comments about the UK economy or the central bank’s policy outlook could prove GBP negative. These will be followed by the Treasury Committee’s inflation report hearings.
Today’s UK BBA Loans for House Purchase data revealed a slight decline in approvals, but the report had little impact on the pound.
US dollar traders will be awaiting today’s slew of economic data, including the influential durable goods orders data for May.
While orders are believed to have contracted in May, the rate of contraction is believed to have eased significantly from April.
The upcoming G20 meeting in Japan between Chinese President Xi Jinping and President Donald Trump is also remaining in focus.
Speculation is rising that the two superpowers could potentially ease trade tensions during the summit.
Scott Kennedy, a US-China expert at the Centre for Strategic and International Studies in Washington, remains more cautious, however.
He said: “I think at best we could see a superficial agreement to halt further escalation of the trade war and an agreement to resume negotiations.”