US dollar has seen slight movements in the trading session as market watchers cautioned the testimony of the new Federal Reserve governor, Jerome Powell, who may set the greenback direction in the coming period. Powell's testimony will be his first public appearance since being sworn earlier this month. The markets will want to know if Powell will continue in the monetary tightening path initiated by Janet Yellen or will be more hawkish.
The dollar index rose almost 2% after hitting a three-year low earlier this month and is currently trading at 89.70. Most analysts believe that the dollar will not rise strongly after Powell's speech, as the markets look at the Federal Reserve's preferred gauge data for inflation the core PCE index, which is expected to rise by 1.5% in January, which is still far from the Fed's target of 2%.
European markets will be on a new date for political uncertainty. Italian elections are due to take place next Sunday. On the same day, the SPD will decide whether to participate in the coalition, which could secure a fourth term for Angela Merkel.
