Powell repeats that rates are likely to stay on hold

• Powell sees “US economy glass as much more than half full”

• Fed chief praises bank’s policy saying that US growth forecast are little changed against year’s start

• US dollar index (USDIDX) breaks above the resistance zone at 50% Fibo level

Chairman of the Federal Reserve, Jerome Powell, delivered a speech yesterday at Rhode Island. Top US central banker stroke an upbeat tone when it comes to the US economic expansion. He said that at this point in the long expansion, he still sees “US economy glass as much more than half full”. Powell continued saying that with the right policies in place, it is possible to extend it further and spread its benefits more broadly to the American people. Fed chief also touched on the topic of interest rates. However, he basically just reiterated message he kept repeating since the latest FOMC meeting - the rates are likely to stay on hold but policy path is not following any preset course and the Reserve will act in case there is a material change to outlook. Powell also praised Fed’s policy saying that in spite of deteriorating global outlook, US growth forecasts are little changed against year’s start. Unfortunately, the speech was not followed by the Q&A session therefore audience did not get a chance to ask Fed chief about his latest meeting with Donald Trump. Nevertheless, USD strengthened during the speech even in spite of the fact that Powell did not say anything new.

The US dollar index (USDIDX) extended upward move yesterday and managed to launch today’s trading above the resistance zone ranging near the 50% Fibo level (98.10) of a decline started at the beginning of October. The index bottomed out two days after Fed delivered latest rate cut and has been moving higher since. Near-term resistance can be found at 61.8% Fibo (98.40). Source: xStation5