FX Update: The dollar has traded firmer for a second day
FX Update: The dollar has traded firmer for a second day, buoyed by an upbeat prognosis of the U.S. economy and outlook by Fed chair Powell yesterday at his semi-annual testimony before the Senate Banking Committee. EUR-USD descended to a three-day low at 1.1631 while USD-JPY ascended above 113.00 for the first time since January. AUD-USD printed a one-week low at 0.7363 and USD-CAD a three-week high at 1.3227. Powell's remarks seemed to hit a sweet spot, having expressed optimism on the growth outlook while being somewhat circumscribed on inflation, which leaves the Fed on course for another 25 bp hike in September, and another in December, but not to the displeasure of equity investors, who have also been encouraged by positive Q2 corporate earnings announcements, and expectations for more to come. In the UK, the prime minister once again survived a key vote on a Brexit-related bill by the skin of her teeth last night (although lost one concerning the regulation of medicines after Brexit). So the PM and her government survives, but Brexit process is looking borderline disorderly.