U.S. Dollar Climbs After Powell's Testimony

(RTTNews) - The U.S. dollar advanced against its major counterparts in the New York session on Tuesday, as Federal Reserve Chair Jerome Powell said that recent data showed progress in easing inflation but officials need more confidence before easing monetary policy.

In his semi-annual testimony before the House Financial Services Committee, Powell said that the most recent inflation readings indicated some modest further progress but more good data is needed to strengthen confidence that inflation is moving towards the target.

"In light of the progress made both in lowering inflation and in cooling the labor market over the past two years, elevated inflation is not the only risk we face," Powell said. "Reducing policy restraint too late or too little could unduly weaken economic activity and employment."

Addressing the current state of the U.S. economy, Powell noted recent indicators suggest the economy continues to expand at a solid pace.

He added, "In the labor market, a broad set of indicators suggests that conditions have returned to about where they stood on the eve of the pandemic: strong, but not overheated."

The greenback moved up to a 5-day high of 161.51 against the yen and a 4-day high of 1.2777 against the pound, from yesterday's close of 160.79 and 1.2805, respectively. The greenback may challenge resistance around 164.00 against the yen and 1.23 against the pound.

The greenback advanced to 4-day highs of 1.3648 against the loonie, 0.6723 against the aussie and 0.6112 against the kiwi, from yesterday's closing values of 1.3634, 0.6736 and 0.6125, respectively. The currency is likely to locate resistance around 1.38 against the loonie, 0.64 against the aussie and 0.58 against the kiwi.

The greenback edged up to 1.0805 against the euro from Monday's close of 1.0823. The currency is likely to locate resistance around the 1.06 level.

The greenback rebounded to 0.8986 against the franc. This may be compared to a previous 4-day high of 0.8990. Next key resistance for the currency is seen around the 0.92 level.