The pevious speech by the new Fed chairman Jerome Powell before Congress on Tuesday lent strong support to the reserve currency. Today we expect his second appearance, and given his hawkish views, we may well expect a further strengthening of the dollar, despite the GDP data for the fourth quarter released yesterday that was slightly worse than expected at 2.5% vesus 2.6%. Many Fed officials are confident in the strength and stability of the economy. Furthermore, economists are confident in the growth rate of inflation to 2.5% while the yield on long-term debt is at record highs.
After the first performances of Jerome Powell, US stocks experienced the worst month since January 2016. The S&P 500 index fell more than one percent from last month.
Against the background of the strengthening dollar, energy prices continue to decline and the price of Brent crude oil is approaching the mark of 64 dollars per barrel.
