* GRAPHIC-World FX rates in 2019:
* Fed's Powell says trade, global concerns weigh on U.S. economy
* Dollar hits session low vs yen, euro after Powell remarks
* Markets expect 25-basis-point cut later this month
(Adds analyst comment, updates prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, July 10 (Reuters) - The dollar retreated on Wednesday
after Federal Reserve Chairman Jerome Powell struck a downbeat tone in
congressional testimony, saying trade uncertainties and concerns about
the global outlook continued to exert pressure on the U.S. economy.
The greenback hit session lows versus the euro and yen after
Powell's comments, which reinforced expectations the Fed will cut
interest rates for the first time in a decade at its next monetary
policy meeting later this month.
In prepared remarks to a congressional committee, Powell said the
Fed stands ready to "act as appropriate" to sustain a
He also contrasted the Fed's "baseline outlook" of
continued U.S. growth against a considerable set of risks - including
persistently weak inflation, slower growth in other major economies,
and a downturn in business investment driven by uncertainty over just
how long the Trump administration's trade war with China and other
countries will last.
"Powell's semi-annual testimony to Congress indicates that
despite the trade truce following the recent G20 meeting and the
strength of employment growth in June, the Fed intends to push ahead
with a rate cut at the FOMC meeting at the end of this month,"
said Paul Ashworth, chief U.S. economist, at Capital Economics.
"We had previously anticipated that those positive
developments would convince the Fed to delay that rate cut until September."
Expectations for a 50-basis-point rate cut at the July meeting
have evaporated, but investors still expect a 25 basis-point cut due
to weak inflation and worries about growing business fallout from the
U.S.-China trade war.
The Fed minutes of the June policy meeting released on Wednesday
as well echoed Powell's comments to Congress.
In their June 18-19 meeting, which introduced the near-term
possibility of a rate cut, multiple policymakers said rates should
come down to "cushion the effects" of a U.S. trade war and
to firm up inflation that is failing to meet the central bank's
2%-a-year target, according to minutes from that meeting released on Wednesday.
Charlie Ripley, senior investment strategist at Allianz Investment
Management said the Fed minutes backed expectations of a near-term
"The idea of 'insurance' rate cuts may be a difficult
proposition for some policy makers to grasp, but markets are signaling
that a decline in policy rates is required in order to sustain the
current economic expansion," he added.
In afternoon trading, the dollar index slid 0.4% to 97.097 .
Against the yen, the dollar fell 0.4% to 108.43, dropping 0.5%
against the Swiss franc to 0.9892 franc .
The euro, meanwhile, rose 0.4% to $1.1252 .
Currency bid prices at 2:55PM (1855 GMT)
Description RIC Last U.S. Close Pct YTD Pct
High Bid Low Bid
Previous Change Change
Euro/Dollar EUR= $1.1252 $1.1206 +0.41% -1.89%
Dollar/Yen JPY= 108.4300 108.8400 -0.38% -1.66%
Euro/Yen EURJPY= 122.00 122.01 -0.01% -3.34%
Dollar/Swiss CHF= 0.9892 0.9934 -0.42% +0.79%
Sterling/Dollar GBP= 1.2505 1.2465 +0.32% -1.98%
Dollar/Canadian CAD= 1.3071 1.3125 -0.41% -4.15%
Australian/Doll AUD= 0.6959 0.6927 +0.46% -1.28%
Euro/Swiss EURCHF= 1.1131 1.1135 -0.04% -1.09%
Euro/Sterling EURGBP= 0.8996 0.8991 +0.06% +0.13%
NZ NZD= 0.6642 0.6603 +0.59% -1.12%
Dollar/Norway NOK= 8.5803 8.6505 -0.81% -0.68%
Euro/Norway EURNOK= 9.6527 9.6960 -0.45% -2.56%
Dollar/Sweden SEK= 9.4166 9.4712 -0.20% +5.05%
Euro/Sweden EURSEK= 10.5978 10.6190 -0.20% +3.25%
(Reporting by Gertrude Chavez-Dreyfuss Editing by Chizu Nomiyama)
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