EURUSD is back to growing after Powell calmed investors down.
The major currency pair is slowly improving on Thursday. The current quote for the instrument is 1.0495.
The US Fed Chairman Jerome Powell had to be as diplomatic and flexible as possible to convince market players and policymakers that the regulator was keeping all risks under control.
Powell admitted that the risk of recession really existed if the benchmark interest rate was high. However, he gave an assurance that the Fed was pretty confident in its monetary moves. The Fed has to raise the rate to take control over inflation, first of all, contraction in demand. If the rates are high, consumers will take a break from making major purchases. If it makes inflation go down, the regulator will achieve its goal.
At the same time, Powell said that the rate hikes wouldn’t slow down inflation in food products and energies.
Overall, his comments were enough for investors to stop seeing recession risks everywhere they look. Demand for the “greenback” as a “safe haven” asset dropped.
Later today, market players will switch their attention to the statistics. The US is scheduled to report on the Unemployment Claims, as well as the Manufacturing/Services PMIs in June from Markit.