USD weakens after initial Powell's comments

At 2:30 p.m. BST Fed Chair Jerome Powell started his testimony before the Senate during which he will discuss the current economic situation in the US. Text of the speech itself does not change the rhetoric of the FED and did not cause any moves on the market. Here are the key remarks from Powell:

• Fed is "heavily committed" to bring inflation down to 2% target

• The pace of future rate hikes will depend on the data

• Available data for May suggest that core inflation probably remained at the April level (4.9% per annum) or slightly decreased.

• Recent data suggest that real GDP increased in the current quarter, while consumer spending remains high

• The housing sector appears to be weakening

• The demand for labor is "very strong" while the supply remains limited

• The financing conditions have tightened considerably

• Inflation clearly surprised upwards and there may be more surprises

• The US economy is strong and capable of tightening monetary policy

However USD weakened and indices managed to erase some of the early losses after Powell highlighted signs of demand destruction and evolving economic outlook. Fed Chair also said that market pricing for additional hikes is appropriate and FED  is using its tools `pretty vigorously now'.

EURUSD jumped after initial Powell comments, however buyers struggle to break above local resistance 1.0580. Source: xStation5