3 weeks ago
Forex

Dollar Kept in Check by Strong Sterling on Fresh Brexit Delay Hopes

Investing.com - The U.S. dollar traded higher against a basket of major currencies Wednesday, amid upbeat remarks on the economy

Investing.com - The U.S. dollar traded higher against a basket of major currencies Wednesday, amid upbeat remarks on the economy from Fed Chairman Jerome Powell, though gains were limited by a stronger pound.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.12% to 95.98.

In his second day of testimony in front of the House Financial Services Committee, Powell continued to deliver an upbeat assessment of the economy and added to expectations the central bank was nearing an end to shrinking its balance sheet

“We’ve worked out the framework of a plan, that we hope to be able to announce soon, that will light the way all the way to the end of balance sheet normalization and that will result in the end of asset runoff sometime later this year,” Powell said.

Still, upside in the dollar's was kept in check by an ongoing rise in sterling to seven-month highs after European leaders indicated they would consider delaying the UK's departure if a trade deal is not agreed by March 29.

"We would support an extension request only if it was justified by a new choice of the British," French President Emmanuel Macron told reporters. "But we would in no way accept an extension without a clear objective."

GBP/USD rose 0.44% to $1.3308, while EUR/USD fell 0.08% to $1.1376

USD/JPY rose 0.35% to Y110.96 as Wall Street moved off session lowers despite somber remarks on trade from U.S. trade representative Robert Lighthizer.

Lighthizer said "it is too early to predict the outcome” of negotiations between the U.S. and China, as "significant structural changes" were needed to the Chinese economy.

USD/CAD fell 0.14% to C$1.3147 as the loonie was supported by strong gains in oil prices, which countered Canada inflation data that undershot economists' expectations.