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The US dollar asserted its strength in the Wall Street trade. Its index rebounded to the highest level in two weeks.
The index jumped over the level of 96.40, having gained 40 pips since the previous session. Nevertheless, traders are sensibly cautious to open long bets on the US dollar amid softer rhetoric of the Federal Reserve.
During the North American session, Fed Chairman Jerome Powell spoke at the meeting with teachers at the town hall in Washington. The policymaker praised sound economic conditions in the country Nevertheless, he acknowledged a threat of a slowdown in the global economy. In this context, a rate hike is out of the question at present.
Investors are closely monitoring developments in the trade relations between the US and China. Market participants share hopes that the US and China’s state leaders will eventually settle a mutually beneficial trade deal at the nearest meeting. Investor optimism dents demand for safe haven assets. The dollar/yen pair traded higher in the Asian session, having approached 110.00.
At the same time, not all risky assets are holding the upper hand on Forex. The Australian dollar was making a correctional decline versus its American counterpart in the Asia-Pacific trade. The AUD/USD pair dropped below 0.7100.
The aussie has been trapped at the level around a two-week low amid rising concerns that the Reserve Bank of Australia could trim the official cash rate in the short term as escalating global headwinds pose a threat to the domestic economy.
Meanwhile, the New Zealand dollar also gave in to bearish pressure. The NZD/USD pair slumped to the level slightly above 0.6740, having shed almost 80 pips. Data on New Zealand’s labor market dealt a blow to the kiwi dollar as an unemployment rate grew in the fourth quarter.
The key event of the European session is a policy meeting of the Bank of England. Traders know the outcome of the event in advance. However, economic forecasts from the Monetary Policy Committee could influence the pound sterling today.

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