USD declines after the testimony, GBP goes up

On Thursday, the dollar approached its lowest level in a month against a basket of currencies, after Jerome Powell, Chairman of the Federal Reserve, stuck to his usual messages in his semi-annual testimony, which did not include any surprises.

Sterling rose to near a one-year high ahead of the Bank of England’s interest rate decision later in the day. A report on inflation, which continues to be high, released on Wednesday is likely to keep policymakers on their toes.

In his address to members of the House of Representatives in Congress on Wednesday, Powell said that continuing to raise US interest rates provides a “very good prediction” of what the Federal Reserve will do if the economy continues in its current direction. These statements are in line with what the US central bank said at its monetary policy meeting last week.

And the dollar index settled in the latest transactions at 102.09 points, close to its lowest level in five weeks at 102 points, after falling almost 0.5 percent in the previous session.

Trading in Asia was on a tight note, with stock exchanges in Hong Kong and China closed for a holiday.

The euro rose to its highest level in more than a month at 1.0995 against the dollar, extending its climb after rising 0.65 percent on Wednesday.

The British pound fell 0.1 percent to 1.2755 against the dollar.

The Bank of England is set to raise interest rates for the 13th consecutive time later on Thursday, a day after data revealed that inflation was higher than expected. Dealers are divided between raising it by 25 and 50 basis points.

The dollar fell 0.05 percent to 141.81 against the yen, after touching a seven-month peak of 142.37 against the Japanese currency in the previous session.

And the Chinese yuan stabilized in foreign transactions yesterday, Wednesday, at its lowest level in seven months, and recorded in the latest transactions 7.1823 against the dollar.

The Australian dollar fell 0.51% to 0.6762 against the dollar, and the New Zealand dollar fell 0.2% to 0.6190 against the US currency.