Round two for Powell

The dollar has continued to strengthen to a six week high this Thursday, supported by an upbeat and hawkish tone from Federal Reserve Chairman Jerome Powell to raise interest rates 4 times. Powell will testify again today in front of the Senate as investors keep an eye on comments regarding the U.S. economy and future rate hikes.

Another item of interest today is the Core Personal Consumption Expenditures report, which represents the average consumer spending per month. The Core PCE, one of the Fed’s preferred gauges of inflation, matched estimates growing at 1.5% YoY. Personal Income in the U.S. also rose 0.4% MoM in January, slightly above expectations.

Around the globe

In the euro zone, soft inflation data lowered expectations that the European Central Bank will slow its stimulus package this year. This has brought EUR/USD to a six-week low, currently trading below 1.22. EUR is also under pressure as the Italian national election looms.

The pound is also trading at six-week lows against the U.S. dollar this morning due to uncertainty around the most recent Brexit deal, as both sides are seemingly far apart on their expectations.