Breaking: EUR/USD jumps above 1.1250 as Powell drops the patient stance
|The Federal Reserve will act as appropriate, says the head of the world's most powerful central bank. Powell's words deviate from the previous mantra of remaining patient on interest rates. In his Chicago speech, he may be providing the first hint that the Fed may cut interest rates this year.
Powell referred to trade tensions as a substantial factor to consider.
EUR/USD has jumped from 1.1235 to 1.1265 before settling lower. Other currencies have seen a similar reaction.
Background: Markets foresee a rate cut
Fed Chair Jerome Powell is speaking as markets are speculating that the Fed will cut interest rates this year, perhaps as early as September. Weak inflation and high uncertainty due to the trade wars are behind the drop in bond yields.
The US Dollar has been on the back foot also due to the dovish comments by Saint Louis Fed President James Bullard who wants a rate cut "soon." The Fed meets in two weeks and is set to leave rates unchanged.
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