Yesterday the dollar fell against its major rivals after Federal Reserve Chairman Jerome Powell struck a dovish tone in his statement to Congress. He cited trade tensions and concerns about the global economy to reinforce expectations of a rate cut in July.
Despite strong employment data in June and the truce in the trade war between China and the US agreed at the G20 summit, investors who were expecting a slightly more positive tone from Powell were disappointed. The dollar fell 0.4% against the Japanese yen and 0.5% against the Swiss franc.
The euro remained near its three-week lows against the dollar as investors lowered their expectations of 0.5% US rate-cut in July. European data has been coming in weaker than US data meaning traders are expecting further losses for the euro against the dollar. It started flat against the dollar yesterday until Powell's statement but has lost 1.3% over the last few weeks.
EURUSD opened at 1.1216 and rose sharply across the day following Jerome Powell’s comments, closing near a high of 1.1257
The pound was slightly higher against the dollar yesterday, primarily due to dollar weakness and just moved off the $1.2439 mark, the lowest it has been since April 2017. The ongoing Conservative leadership contest and the worries of no deal Brexit remain in place, preventing any large betting on the pound but it is currently in a process of gradual depreciation in the absence of any further clarity on how the UK will leave the EU.
GBPUSD opened at 1.2462 and climbed to a high of 1.2517 in the early afternoon before dropping back slightly to 1.2509
GBPEUR opened to 1.1105 and despite reaching a midday 1.1126 close to midday the pair closed only slightly higher at 1.1113
