- U.S. housing starts fell to more than 2-year low
- Focus on Powell testimony
- Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(Updates prices, adds comment, FX table, changes byline, dateline, previous LONDON)
The dollar fell to a three-week low on Tuesday, with investors cautious ahead of a key testimony by Federal Reserve Chairman Jerome Powell later in the session, in which he might provide further clues about the direction of future interest rates.
Powell will testify before the Senate Banking Committee on the first day of a two-day appearance before lawmakers. Market watchers expect him to underline the Fed's sensitivity to asset prices and deliver an upbeat assessment of domestic growth prospects.
"The key focus of the market will be on whether Mr. Powell will deviate from his dovish stance," said Boris Schlossberg, managing director of FX strategy, at BK Asset Management in New York.
"This appears unlikely as the history of Fed policy changes suggests that it will stick to an easing course to engineer a soft landing of the economy before resuming normalization," he added.
Money markets have ruled out any more rate hikes for the remainder of the year with an 80 percent probability of a rate cut by January, 2020.
A report, meanwhile, showing U.S. housing starts fell to a more than two-year low in December did not help the dollar's cause, further affirming expectations that Powell will maintain his dovish views.
Data showed housing starts dropped 11.2 percent to a seasonally adjusted annual rate of 1.078 million units last month, the weakest reading since September 2016.
Against a basket of other currencies .DXY , the dollar was down 0.1 percent at 96.34, after earlier hitting a three-week trough of 96.253.
The dollar was also down 0.2 percent versus the yen at 110.74 JPY= .
======================================================== Currency bid prices at 9:34AM (1434 GMT)Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR= $1.1364 $1.1358 +0.05% -0.93% +1.1375 +1.1345 Dollar/Yen JPY= 110.7500 111.0600 -0.28% +0.44% +111.0800 +110.6700 Euro/Yen EURJPY= 125.86 126.11 -0.20% -0.29% +126.2200 +125.7400 Dollar/Swiss CHF= 1.0003 1.0006 -0.03% +1.93% +1.0013 +0.9995 Sterling/Dollar GBP= 1.3169 1.3095 +0.57% +3.23% +1.3237 +1.3091 Dollar/Canadian CAD= 1.3222 1.3188 +0.26% -3.04% +1.3236 +1.3185 Australian/Doll AUD= 0.7153 0.7165 -0.17% +1.48% +0.7173 +0.7143 arEuro/Swiss EURCHF= 1.1368 1.1364 +0.04% +1.01% +1.1379 +1.1352 Euro/Sterling EURGBP= 0.8626 0.8674 -0.55% -3.98% +0.8676 +0.8589 NZ NZD= 0.6881 0.6882 -0.01% +2.44% +0.6888 +0.6872 Dollar/DollarDollar/Norway NOK= 8.5845 8.5961 -0.13% -0.63% +8.6253 +8.5815 Euro/Norway EURNOK= 9.7552 9.7630 -0.08% -1.52% +9.7879 +9.7547 Dollar/Sweden SEK= 9.3099 9.3066 +0.08% +3.86% +9.3291 +9.2999 Euro/Sweden EURSEK= 10.5820 10.5737 +0.08% +3.10% +10.5980 +10.5710 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ G10FX http//tmsnrt.rs/2BVfajO^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
