SHANGHAI, Feb 24 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.
The dollar was modestly higher on Tuesday afternoon after U.S. Federal Reserve chair Jerome Powell pushed back on suggestions that loose monetary policy risked unleashing inflation, while the British pound rose to fresh three-year highs.
The growing likelihood that Congress will pass President Joe Biden’s $1.9 trillion stimulus plan has stoked fears about a possible spike in inflation. As those expectations have risen, so has the popularity of the so-called reflation trade, which this month has pulled the dollar lower.
But in testimony before the U.S. Senate Banking Committee, Powell said the central bank would keep its policies in place as it focused attention on getting Americans back to work.
“The economy is a long way from our employment and inflation goals, and it is likely to take some time for substantial further progress to be achieved,” said Powell.
On Wall Street, the Dow Jones Industrial Average bounced back from steep losses and closed the session in the green on Tuesday after Federal Reserve Chair Jerome Powell relieved some of the concerns about higher interest rates and inflation.
The blue-chip Dow wiped out a 360-point loss and closed 15.66 points higher, or 0.1%, at 31,537.35. The S&P 500 also reversed a 1.8% loss and ended the day 0.1% higher at 3,881.37.The Nasdaq Composite slipped 0.5% to 13,465.20 after dropping as much as 3.9% earlier. At its session low, the tech-heavy benchmark fell below its 50-day moving average, a key technical indicator, for the first time since Nov. 3 on an intraday basis.
Oil prices were steady on Tuesday, trading close to more than year-long highs on signs that global coronavirus restrictions were being eased although concerns about the pace of a U.S. economic recovery kept gains in check.
Brent crude was up 18 cents, or 0.28%, at $65.42 a barrel, still close to its highest levels since January 2020. U.S. crude settled 3 cents lower at $61.67 per barrel.
Gold edged lower in choppy trade on Tuesday as the dollar recovered ground lost in the immediate wake of comments from U.S. Federal Reserve Chairman Jerome Powell, who said the economic recovery was “uneven and far from complete.”
Spot gold was down 0.3% at $1,803.62 an ounce by 2:10 p.m. EST, after briefly moving into positive territory as the dollar dipped following Powell’s comments.
U.S. gold futures settled down 0.1% at $1,805.90.
On the data front, euro zone inflation rose 0.2% month-on-month in January, Eurostat confirmed on Tuesday, breaking from a months-long trend of falling prices.
US new home sales for January and crude inventory data from the US Energy Information Administration (EIA) are set for release today.
