Powell Sends the USD Down, Promising to Keep the Cash Flowing

Posted Tuesday, February 23, 2021 by
Skerdian Meta • 1 min read

The USD has been bearish for a long time, despite the economic boom in the US. The extensive monetary policies which Powell is promising to keep for as long as needed and the fiscal programmes that have been implemented with more on the way have been helping in keeping the USD bearish, together with the falling bond yields.

Yields have reversed higher in recent weeks, but the USD remains bearish and it is falling further after Jerome Powell’s comments to keep the monetary policy loose, despite the economic boom, which he denied actually. Below are the comments from his testimony:

Comments From Jerome Powell First Testimony:

  • Economy is a long way from employment and inflation goals
  • “Economic momentum has slowed substantially after summer rebound”. Is he looking at the data which has been showing a surge across all sectors in rent months?
  • Repeats promise to keep rates near zero until full employment and inflation rises to 2% and is on track to moderate exceed 2% for some time
  • Says will not tighten monetary policy solely in response to a strong labor market
  • Fed will clearly communicate ‘well in advance’ of any change to bond buying pace
  • It will likely take some time for substantial further progress to be achieved
  • Economy is a long way from employment and inflation goals
“We are committed to using our full range of tools to support the economy and to help ensure that the recovery from this difficult period will be as robust as possible,” he said. The USD has turned bearish again after these comments.
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