Global Foreign Exchange Market
THE dollar’s performance this week revolved around Powell’s view on the number of rate hikes necessary in 2018 to prevent the economy from overheating. After his first congressional testimony on Tuesday, the dollar rose to February’s high of 90.613, and then declined to 90.324 by the end of the week, capping the week’s gain at 0.5%. This resulted from the Fed chair commenting that pick-up in wages and signs of an overheating have not materialised. Disappointing January durable goods orders at -3.7% m/m from 2.6%m/m previously, and January new home sales which came in at -7.8%m/m (a second consecutive month of negative growth) produced minimal drag on the greenback.