News: FOREX-Dollar subdued ahead of Powell testimony; Aussie slips

The U.S. dollar was tentative on Tuesday ahead of testimony by U.S. Federal Reserve chair Jerome Powell, while the Aussie slid after the Reserve Bank of Australia raised its cash rate by 25 basis points but tempered hawkishness in its statement.

The Australian dollar AUD=D3 eased to a more than two-month low of $0.6690 and was last down 0.33% at $0.6712 after the central bank raised its cash rate to the highest in more than a decade at 3.60%, as expected.

The RBA changed a reference to further rate "increases", saying instead that "further tightening" would be needed, suggesting that the central bank might be nearing the end of its cycle of increases.

"An initial glance at RBA's statement suggests they are nearing the end of the tightening cycle, and perhaps one step closer to publicly discussing a pause," said Matt Simpson, senior market analyst at City Index.

Meanwhile, the U.S. dollar index =USD , which measures it against six major rivals, fell 0.077% to 104.170, having slipped 0.26% overnight. The index is down 0.6% for the month following a 2.6% gain in February.

The euro EUR=EBS was up 0.11% to $1.069, extending its nearly 0.5% rise overnight. Sterling GBP= was last trading at $1.2044, up 0.19% on the day, while the kiwi NZD=D3 rose 0.27% to $0.621.

The Japanese yen JPY=EBS was mostly flat at 135.94 to the dollar ahead of the final policy meeting for Bank of Japan Governor Haruhiko Kuroda on Thursday and Friday.

Investor attention will firmly be on Powell's testimony before Congress on Tuesday and Wednesday, with the February jobs report due on Friday also keenly awaited.

Kevin Cummins, chief economist at NatWest Markets, said Powell would likely express heightened concern about inflation but would probably stop short of raising expectations for a 50 basis point rate increase on March 22.

After delivering significant rises last year, the Fed raised interest rates by 25 basis points at its past two meetings, but resilient economic data throughout February stoked fears of the central bank going back to bigger steps.

"We suspect he will sound noncommittal for now and take his cues from the looming upcoming key data," said Cummins, who expects the Fed to raise interest rates by 50 basis points.

Fed funds futures traders are pricing in a 76% probability the Fed will raise rates by 25 basis points at its March meeting. They also expect interest rates to peak at 5.48% in September and still be above 5% at the end of the year. FEDWATCH

"What has become clear to financial markets is that inflation is proving far stickier than most had felt at the start of the year," ING economists said.

"A return to the disinflation and weaker dollar narrative will have to wait."

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	Currency bid prices at 0423 GMT 

 Description	  RIC		 Last		   U.S. Close  Pct Change	 YTD Pct	 High Bid	Low Bid 
											  Previous				   Change				  
											  Session											
 Euro/Dollar	   EUR=EBS	$1.0690		$1.0684	 +0.07%		 -0.23%	  +1.0693	 +1.0676 
 Dollar/Yen		JPY=EBS	136.0050	   136.0800	-0.07%		 +3.62%	  +136.1650   +135.9900 
 Euro/Yen		 																			 
 Dollar/Swiss	  CHF=EBS	0.9298		 0.9308	  -0.10%		 +0.57%	  +0.9314	 +0.9299 
 Sterling/Dollar   GBP=D3	 1.2043		 1.2027	  +0.17%		 -0.38%	  +1.2047	 +1.2017 
 Dollar/Canadian   CAD=D3	 1.3606		 1.3612	  -0.05%		 +0.41%	  +1.3618	 +1.3600 
 Aussie/Dollar	 AUD=D3	 0.6710		 0.6732	  -0.34%		 -1.58%	  +0.6748	 +0.6690 
 NZ				NZD=D3	 0.6205		 0.6197	  +0.10%		 -2.30%	  +0.6214	 +0.6190 
 Dollar/Dollar																				   

All spots FX= Tokyo spots AFX= Europe spots EFX= Volatilities FXVOL= Tokyo Forex market info from BOJ TKYFX

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World FX rates	https://tmsnrt.rs/2RBWI5E 

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