Events to watch out for today:
17:00 GMT+3. USD – Federal Reserve Chairman Jerome Powell Speaks
USDJPY:
The Japanese yen (JPY) extends its losses for the second consecutive session on Tuesday. The slight improvement in the U.S. dollar (USD) is supporting the Dollar-JPY pair. However, the Yen may limit its decline due to fears of Japanese government intervention in the currency markets.
The Japanese Yen is also struggling due to purchases of overseas assets by Japanese individuals under the recently revamped tax-free investment scheme, the Nippon Individual Savings Account (NISA) program. According to Nikkei Asia, the scale of these purchases is expected to exceed the country’s trade deficit in the first half of this year.
U.S. Treasury yields are under pressure amid growing speculation that the Federal Reserve (Fed) may cut interest rates in September, potentially limiting U.S. dollar gains. CME’s FedWatch tool shows that betting markets estimate the probability of a rate cut in September at 76.2%, up from 65.5% a week earlier.
On Tuesday, Federal Reserve Chairman Jerome Powell will present his “Semiannual Monetary Policy Report” to the U.S. Congress. Powell may provide a broad overview of the economy and monetary policy, and his prepared remarks will be released before the speech on Capitol Hill.
Trading recommendation: Trade predominantly with Buy orders from the current price level.
Origin: FreshForex
