Chef Powell could bring back the roller coaster of the markets

What you need to take care of on Wednesday, June 22:

US Federal Reserve Chief Jerome Powell will testify before Congress. His prepared remarks will be released before the event. Market participants will be looking for clues about future quantitative tightening. Additionally, the UK will release updates on inflation data.

The US dollar edged lower against most of its major rivals on Tuesday amid improving market sentiment. USD/JPY, however, climbed to a new multi-year high of 136.61, holding close at the end of the US session. The yen’s collapse is mainly due to the Bank of Japan’s stubborn commitment to its ultra-loose monetary policy.

Global indices rose slightly, with Wall Street posting substantial gains and limiting demand for safety. Yields on US government bonds rose, but not enough to revive inflation concerns.

Meanwhile, central bankers continue to hint at aggressive measures. Bank of England chief economist Huw Pill said they would certainly be ready to act if they saw evidence of lingering price pressures. Reserve Bank of Australia Governor Philip Lowe opened the door to a 50 basis point rate hike in July. Finally, Olli Rehn, member of the Governing Council of the European Central Bank, said that it is very likely that the rate hike in September will be higher than the 25 basis points forecast for July.

The EUR/USD pair is trading around 1.0530, with little variation on a daily basis. GBP/USD posted a modest advance and is now trading around 1.2280. The improved tone in equities helped commodity-linked currencies gain against their US rival. AUD/USD is at 0.6970, while USD/CAD is trading in the 1.2910 price zone.

Gold is struggling with the $1,830 level under pressure. Crude oil prices were little changed on Tuesday, with WTI now trading at around $109.50 a barrel.

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