The Greenback Gives Up Gains As Safe-Haven Asset Underperform

Daily Currency Update

USD - United States DollarFed Chairman, Jerome Powell gave the first of two days of testimony before lawmakers in Washington yesterday, providing a relatively upbeat assessment of the U.S. economy. Powell said the Federal Reserve is also "closely monitoring" the deadly outbreak of the Coronavirus, which has now been officially named by the World Health Organization as COVID-19. Powell went on to say the virus has "lead to disruptions in China that spill over to the rest of the global economy," he stopped short of saying the outbreak had changed the Fed's outlook for the U.S. economy for the next few quarters. The overall expectation among many members of the FOMC is that rates will remain on hold through 2020.The U.S. dollar edged lower through trade on Tuesday and into Wednesday morning, edging off four-month highs as risk appetite improved and demand for haven assets abated. With volatility across currency markets largely non-existence as of late, the greenback remains mostly well supported, and we expect the broader bullish narrative to continue, especially as investors look to short the Euro in a carry play to foster a higher yield return. The Euro fell through 1.09 touching 1.0870 before the shift in risk sentiment helped foster a small bounce into this morning's open.With safe-haven assets underperforming overnight, we expect broad-based direction to continue fluctuating on headline new updates and events concerning the COVID-19. Attention turns to Fed Chair Jerome Powell as the primary macroeconomic driver in his second day of testimony on Capitol Hill.