February 26, 2019 / 4:03 PM / 8 months ago

FOREX-Dollar edges up after U.S. consumer confidence, Fed Powell's testimony

    * Fed's Powell sticks to patient approach on rate hikes 
    * U.S. housing starts fall to more than 2-year low
    * Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh

 (Recasts, updates prices, adds Powell's statement, analyst
comment, U.S. consumer confidence data)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, Feb 26 (Reuters) - The dollar gained against most
currencies on Tuesday, boosted by strong U.S. consumer
confidence data and comments on the economy from Federal Reserve
Chairman Jerome Powell that were in line with market
    The greenback gained against the euro, Swiss franc, as well
as the Australian and Canadian dollars.
    In prepared testimony released in advance of a hearing
before the U.S. Senate Banking Committee, Powell said the Fed
will remain "patient" in deciding on further interest rate
hikes, reaffirming the policy shift made by the U.S. central
bank in January.
    This the first of Powell's two-day appearance before the
U.S. Congress.
    "Powell wasn't more dovish than what we saw in January, but
he's certainly less hawkish than he was last year," said Erik
Nelson, currency strategist, at Wells Fargo Securities.
    "The thing is, the market has already priced in this seismic
shift from the Fed toward a more neutral or more data-dependent
    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.
    The dollar overall also benefited from a jump in the U.S.
consumer confidence index for February to 131.4, from a revised
121.7 reading in January.
    Jim O'Sullivan, chief U.S. economist at High Frequency
Economics said the rebound in confidence was "likely helped by
the end to the shutdown and the rebound in equities."
    "The report continues to signal a fairly healthy labor
market," he added.
    In late morning trading, the dollar index, a measure of its
value against a basket of other currencies, was little
changed at 96.398, after earlier hitting a three-week trough of
    The dollar was slightly higher versus the euro at $1.1356
, and rose 0.1 percent versus the Swiss franc to 1.0013
    Against the yen, however, the dollar was down 0.2 percent
versus the yen at 110.80.
    A report showing U.S. housing starts falling to a more than
two-year low in December did not initially help the dollar's
cause, further affirming expectations that Powell will maintain
his dovish views.
    Improving risk appetite was more evident in the British
pound after media reports said Prime Minister Theresa May was
considering delaying the March 29 deadline for the UK's exit
from the European Union.
    "With political risk, if you can delay it or remove the
prospect of a no-deal Brexit, it will always be met with
optimism and a rally in the currency," said Wells Fargo's
    The pound was last up 0.7 percent on the day at $1.3182
    Currency bid prices at 10:50AM (1550 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.1355        $1.1358     -0.03%         -0.99%      +1.1375     +1.1345
 Dollar/Yen       JPY=        110.7400       111.0600    -0.29%         +0.44%      +111.0800   +110.6700
 Euro/Yen         EURJPY=     125.76         126.11      -0.28%         -0.36%      +126.2200   +125.7400
 Dollar/Swiss     CHF=        1.0010         1.0006      +0.04%         +2.00%      +1.0019     +0.9995
 Sterling/Dollar  GBP=        1.3192         1.3095      +0.74%         +3.41%      +1.3237     +1.3091
 Dollar/Canadian  CAD=        1.3193         1.3188      +0.04%         -3.26%      +1.3236     +1.3185
 Australian/Doll  AUD=        0.7160         0.7165      -0.07%         +1.57%      +0.7173     +0.7143
 Euro/Swiss       EURCHF=     1.1368         1.1364      +0.04%         +1.01%      +1.1379     +1.1352
 Euro/Sterling    EURGBP=     0.8606         0.8674      -0.78%         -4.21%      +0.8676     +0.8589
 NZ               NZD=        0.6881         0.6882      -0.01%         +2.44%      +0.6888     +0.6871
 Dollar/Norway    NOK=        8.5938         8.5961      -0.03%         -0.52%      +8.6253     +8.5815
 Euro/Norway      EURNOK=     9.7608         9.7630      -0.02%         -1.47%      +9.7879     +9.7547
 Dollar/Sweden    SEK=        9.3138         9.3066      +0.02%         +3.90%      +9.3291     +9.2999
 Euro/Sweden      EURSEK=     10.5762        10.5737     +0.02%         +3.04%      +10.5980    +10.5710

 (Reporting by Gertrude Chavez-Dreyfuss; 
Editing by Susan Thomas)
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