USD muted after release of Powell's testimony

Text of Fed Chair Powell's semiannual testimony was released today at 1:30 pm GMT. Below are key takeaways from the speech:

• Ongoing progress toward 2% inflation target not assured
• Fed remains highly attentive to inflation risks
• Risk for jobs, price goals moving into better balance
• Inflation has eased notably but remains above 2% goal
• Likely appropriate to cut rates at some point this year
• Fed needs more confidence on inflation to cut rates
• Policy rate is likely at its peak for this cycle
• Economy has made considerable progress over past year on the dual mandate
• Labor demand still exceeds supply, nominal wage growth has been easing
• Labor market remains relatively tight
• There are risks to both cutting rates too early and too fast, as well as too late and too little

Fed Chair has largely repeated the message sent during January FOMC meeting in the text of his speech. Such an outcome was somewhat expected given that data released since FOMC meeting did not signal any major progress in getting back to inflation target.

Powell will testify before the House Financial Services Committee today at 3:00 pm GMT, followed by testimony before the Senate Banking Committee tomorrow at 3:00 pm GMT. Text of the speech will be the same on both days. However, questions from lawmakers may differ.

USD has seen largely muted response to the release. EURUSD moved lower in a knee-jerk move before recovering all the losses, and is now trading little changed compared to pre-release levels.

EURUSD at 15-minute interval. Source: xStation5