Investing.com - The dollar slid lower against a currency basket on Tuesday ahead of congressional testimony by Federal Reserve Chairman Jerome Powell, which markets will be watching closely for any indications on the path of interest rate hikes.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.12% to 94.16 by 03:37 AM ET (07:37 AM GMT).
Powell is to begin two days of testimony on the economy and monetary policy later Tuesday when he appears before the U.S. Senate Banking Committee in Washington.
He is due to appear before the House of Representatives Financial Services Committee on Wednesday.
Powell is expected to reiterate that the Fed is on track to continue with a gradual pace of rate hikes but investors will be on the lookout for any indications that U.S. trade policy is clouding the outlook for tightening.
On Monday, the International Monetary Fund warned that escalating trade tensions are threatening to derail the economic recovery, adding that financial markets seem complacent to the mounting risk.
The dollar was steady against the yen, with USD/JPY last at 112.33, holding below last Friday’s six-month highs of 112.79.
Financial markets In Japan reopened on Tuesday after a holiday on Monday.
The euro pushed higher against the softer dollar, with EUR/USD rising 0.18% to 1.1729.
The pound was a touch higher, with GBP/USD edging up 0.1% tp 1.3247.
Meanwhile, the Australian dollar was slightly higher, with AUD/USD gaining 0.13 to trade at 0.7428.
The New Zealand dollar climbed higher, with NZD/USD advancing 0.81% to a near one-week high of 0.6833.