FOREX-Dollar gains before Powell testimony

(Adds quotes, details; updates prices; changes byline, dateline, previous LONDON) By Karen Brettell NEW YORK, March 7 (Reuters) - The dollar gained against a basket of currencies on Tuesday as investors waited on testimony by Federal Reserve Chairman Jerome Powell for any clues on whether a recent string of strong data and still high inflation is altering his outlook for monetary policy. Powell will testify before Congress on Tuesday and Wednesday, before highly expected jobs data for February on Friday. “The market is feeling fearful, or nervous, ahead of Powell that he might signal a higher path for rates,” said Adam Button, chief currency analyst at ForexLive in Toronto. “I don’t expect a clear signal from Powell in any direction, the problem is that he is going to be speaking so much that any slip of the tongue might be interpreted by the market as a signal.” Investors are pricing for the Fed to hike rates higher for longer as employment and other data stays strong while inflation show signs of staying stubbornly high. Powell may be reluctant to indicate any new hawkish shift in the Fed’s thinking, however, until it is clear that the recent economic trends are likely to last. “I don’t think the Fed wants to introduce any certainty just yet… I think the message from today will be Powell opening the door to a higher terminal rate without forecasting one,” said Button. Friday’s employment report will give new clues on whether January’s blockbuster report, when employers added a much higher-than-expected 517,000 jobs, was a one-off or part of a more sustained trend.

"Today's semi-annual testimony will be important in determining whether the U.S. dollar can regain upward momentum in the week ahead,” said Lee Hardman, senior currency analyst at MUFG. "If (Powell) remains cautious ... that could trigger the dollar index to fall further below the 105.00-level ahead of the release of the NFP report on Friday," Hardman said. The dollar index against a basket of currencies was last up 0.34% at 104.59. The euro dipped 0.28% to $1.0653. The Aussie dollar slid after the Reserve Bank of Australia (RBA) raised its cash rate by 25 basis points to the highest in more than a decade, as was expected, but suggested it might be nearly done tightening.

It was last down 1.14% at $0.6654. The dollar gained 0.25% to 136.26 Japanese yen . Investors are awaiting the final policy meeting for Bank of Japan Governor Haruhiko Kuroda on Thursday and Friday, when the central bank is set to stick to its ultra-loose monetary path. Data on Tuesday showed Japan's real wages fell the most in nearly nine years in January as four-decade-high inflation squeezed the purchasing power of consumers.

======================================================== Currency bid prices at 9:20AM (1420 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change

Session
Dollar index 104.5900 104.2600 +0.34% 1.063% +104.6600 +104.1100 Euro/Dollar $1.0653 $1.0684 -0.28% -0.57% +$1.0695 +$1.0648 Dollar/Yen 136.2550 135.9250 +0.25% +3.93% +136.2750 +135.5600 Euro/Yen 145.14 145.17 -0.02% +3.45% +145.4400 +144.6100 Dollar/Swiss 0.9350 0.9308 +0.45% +1.12% +0.9353 +0.9288 Sterling/Dollar $1.1972 $1.2027 -0.44% -0.99% +$1.2065 +$1.1966 Dollar/Canadian 1.3656 1.3612 +0.33% +0.79% +1.3657 +1.3600 Aussie/Dollar $0.6654 $0.6732 -1.14% -2.37% +$0.6748 +$0.6652 Euro/Swiss 0.9961 0.9942 +0.19% +0.67% +0.9962 +0.9926 Euro/Sterling 0.8896 0.8880 +0.18% +0.59% +0.8899 +0.8858 NZ $0.6183 $0.6197 -0.19% -2.59% +$0.6221 +$0.6182 Dollar/Dollar
Dollar/Norway 10.5230 10.4290 +0.74% +7.05% +10.5250 +10.4060 Euro/Norway 11.2060 11.1294 +0.69% +6.79% +11.2139 +11.1067 Dollar/Sweden 10.5649 10.4478 +0.83% +1.51% +10.5722 +10.4202 Euro/Sweden 11.2556 11.1629 +0.83% +0.95% +11.2580 +11.1400

(Reporting by Karen Brettell; additional reporting by Alun John in London and Ankur Banerjee in Singapore Editing by Nick Zieminski)

Reuters

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FOREX-Dollar gains before Powell testimony

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