Forex Today: USD on the defensive ahead of Powell’s testimony, a busy session ahead

A quiet Asian affair across the fx space this Tuesday, as a sense of calm prevailed in anticipation of the new Fed Chair Powell’s testimony, despite the risk-on rally in the Asian equities. As a result, most majors remained confined with tight trading ranges, except for the Kiwi. The NZD/USD pair slumped -0.30% to trade near 0.7280 levels, as markets continued to weigh in disappointing NZ trade figures.

Among the commodities, gold traded firmer just shy of the $ 1340 mark while both crude benchmarks traded on the back foot ahead of the API weekly crude stockpiles report.

Main topics in Asia

PBoC might track Fed with rate hike if Fed hike in March

China Securities Journal/FXL reporting that the PBoC will likely raise interest rates in open-market operations in March should the Fed hike interest rates.

Japan's Motegi sees CPI rising

Comments from Japanese Economy Minister Motegi are crossing the wires via Livesquawk.

Trump wants to revive steel industry jobs even if takes tariffs

US President Donald Trump wants to revive the US steel industry and create more jobs even if it means applying tariffs on imports from other countries, however, so far the White House has not made a final decision on the issue, according to Reuters report. 

New Zealand's Robertson says strong NZD reflects strong economy

A strong New Zealand dollar (NZD) exchange rate reflects a strong economy, New Zealand Finance Minister Robertson said. 

People aren't worried about inflation - US Treasury Secretary Mnuchin

The US's Secretary of the Treasury Steven Mnuchin is hitting the wires with his take on current inflation conditions.

IMF maintains January forecast of 3.9 pct global growth for 2018 and 2019

IMF’s Lagarde: Effects of MonPol normalization are uncertain

Key Focus ahead

Today’s macro calendar remains a busy one, with a raft of consumer confidence and sentiment data due to be reported from the Euroland ahead of the German preliminary CPI release while the UK docket offers nothing of relevance. Meanwhile, the speeches by the ECB Governing Council members Mersch and Weidmann will be closely eyed for fresh insights on the bank’s monetary policy outlook, especially after the ECB President Draghi’s testimony held yesterday.

In the NA session, a batch of economic releases is due on the cards from the US, including the key durable goods, advance trade balance, and CB consumer confidence numbers. However, the main risk event for the Dollar trade today remains the new Fed Chairman Powell’s testimony on the Semiannual Monetary Policy Report before the House Financial Services Committee, in Washington DC at 1500 GMT.

EUR/USD in consolidation mode, eyes German CPI & Powell testimony

The EUR/USD pair has been restricted to a narrow range of 1.2360-1.2260 since last Wednesday, but a breakout could happen later today post the German preliminary CPI release and Fed's Powell's testimony.

GBP/USD: 1.40 in reach as Powell testimony looms

Sterling can expect some volatility as markets shift under the weight of Fed chairman Jerome Powell's congressional testimony today before the House Finance Committee. 

Spotlight on Powell

Outside of equity markets where the US stock indexes clocked in gains of 1 %, most asset classes remain parked in neutral as all eyes are on Jay Powell.

Key US data preview: US durable goods - Nomura

"Durable goods orders: Excluding volatile transportation orders, we expect a flat reading for January core durable goods orders (Consensus: +0.4% m-o-m).”

Will the Upcoming Election in Italy Pose a Threat to the Euro?

Italy’s upcoming general election, slated to be held next weekend on March 4^th, has garnered far less market attention than its French or German counterparts had last year, and perhaps for good reason.