Early trade in New York: dollar rebounds as Powell hearing underway

The dollar rose against a basket of currencies on Tuesday, rebounding from a two-month low hit the previous day, as risk sentiment improved and the confirmation hearing of new Federal Reserve chair Jerome Powell kicked off. The dollar index, which measures the greenback against six rival currencies, was up 0.33 percent at 93.208. Against the yen the dollar was 0.2 percent higher.
"The dollar is stronger today on the back of the strong domestic equity market right now," said Minh Trang, senior currency trader at Silicon Valley Bank in Santa Clara, California. The S&P 500 and the Dow Jones Industrial Average hit records at the open, led by gains in technology stocks, and data showed US consumer confidence at its highest since November 2000.
"There is a lot of bullishness out there and that's why you are seeing a little bit of a bounce in the dollar," he said. Traders were also paying close attention to comments from Powell in his confirmation hearing before the US Senate Banking Committee. The Fed should "respond decisively" to any new economic crisis, Powell said, positioning himself as an heir to the central bank policies of current chair Janet Yellen and her predecessor Ben Bernanke.
The British pound slipped from a two-month high on Tuesday, having failed to push above $1.34 as Brexit-related doubts began to re-exert their grip on the currency. Sterling was down 0.64 at $1.3231. The Canadian dollar weakened to a one-week low against its US counterpart as oil prices fell.