© Reuters. FILE PHOTO: U.S. dollar banknotes are seen in this illustration taken March 10, 2023. REUTERS/Dado Ruvic/Illustration//File Photo

By Saqib Iqbal Ahmed

NEW YORK (Reuters) -The U.S. dollar edged higher against a basket of currencies on Wednesday after Federal Reserve Chair Jerome Powell said the central bank’s fight to lower inflation “has a long way to go”.

The , which measures the currency against six rivals, was 0.15% higher on the day at 102.66, after the release of Powell’s testimony prepared for delivery to the House Financial Services Committee at 10:00 a.m. ET (1400 GMT).

“Inflation pressures continue to run high, and the process of getting inflation back down to 2% has a long way to go,” Powell said, noting that even as the Fed held off raising interest rates at the Federal Open Market Committee meeting last week “nearly all” participants expected further rate increases would be appropriate by the end of the year.

The hearing, the first of two Capitol Hill appearances this week as part of his twice-yearly reports to federal lawmakers, was set to begin at 10 a.m. (1400 GMT). Powell will appear before the Senate Banking Committee on Thursday.

“The prepared remarks seem like mostly a re-hash of last week’s presser… … I don’t think markets have reacted too significantly thus far,” TraderX market strategist Michael Brown said.

“Consumer Price Index and Non-Farm Payrolls in July are going to be huge events, though it does feel that unless there’s some kind of disastrous jobs print they’re going to hike in July come what may,” Brown said.

Investors broadly expect rate increases to resume at the Fed’s July meeting, though financial market indicators reflect doubts that the Fed will deliver more increases beyond that meeting.


The euro was about flat against the dollar at $1.0915. Against the yen, the dollar was up 0.6% at 142.33 yen, with the Japanese currency under pressure after Bank of Japan Governor Kazuo Ueda on Wednesday reiterated the central bank’s dovish stance to maintain its ultra-loose monetary policy.

The British pound seesawed on Wednesday, initially jumping after data showed UK inflation accelerated more than expected in May, then reversing gains as concerns flared over the Bank of England’s ability to protect the economy from stagnating.

The annual pace of British consumer price gains was steady at 8.7% in May, against hopes it had cooled since April, with the UK’s inflation rate remaining more persistent compared with other major economies.

Adam Cole, chief currency strategist at RBC Capital Markets, said sterling’s weakness may be down to fears that “inflation is high enough and consistent enough for it to become negative for the currency”.

The pound was last down 0.43% at $1.2708, a near 1-week low.

The Australian dollar was down 0.55% at $0.675, on pace for a 4th straight day of losses, weighed down by the release on Tuesday of the minutes of the Reserve Bank of Australia’s June policy meeting, where guidance on yet further increases was absent, a sign that markets took as dovish.

The , which is very sensitive to Chinese economic data, has also come under pressure due to lacklustre stimulus measures from Beijing.

extended overnight gains to breach $29,000 for the first time since late May, helped by the launch of a new crypto exchange backed by Fidelity, Citadel Securities and Charles Schwab (NYSE:). It was last up 2.87% at $29,129.


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