US dollar slips before Powell speech, Bitcoin resumes rally

THE US dollar was a touch softer on Wednesday (Mar 6), as traders kept their powder dry ahead of the first leg of congressional testimony from Federal Reserve chair Jerome Powell and the European Central Bank’s policy announcement on Thursday.

Meanwhile, Bitcoin was picking up a head of steam again, although it stayed below the record high reached the day before.

The absence of major catalysts kept the US dollar on the back foot, having slipped on Tuesday after data showed US services industry growth slowed last month.

Traders were now waiting on Fed chair Powell’s first day of testimony before Congress on the state of the US economy, where he is expected to underline that the Fed will wait for more data before making any rate cuts.

“I think he will speak to previous comments that they’re data dependent and that they might cut rates at an upcoming meeting without specifying a particular one,” said Stefan Mellin, chief analyst, FX Strategy, at Danske Bank.

“We think there will be a synchronised easing cycle that means the rate gap between Europe and the US is going to be maintained. That is positive for the US dollar in our view,” Mellin added.