Gold hits one-week high as dollar dips after Powell's testimony

Fed chief signals interest rate cut likely as soon as this month

Some businesses, particularly in manufacturing, have pulled back on spending and hiring because of greater uncertainty about US trade disputes, Fed officials said, according to minutes of the June 18-19 meeting released Wednesday.

Four hours later, the Fed is due to release the minutes from its last policy meeting, when officials edged toward a rate cut as early as this month. "To me, it all depends on where you look in the economy". The U.S. dollar .DXY fell against a basket of other currencies. Meanwhile, U.S. interest rate futures appeared to price in greater odds of a 50-basis-point rate cut this month.

Bostic does not now have a vote on Fed rate policy, but will participate in the debate when the Fed meets in three weeks in a session widely expected to reduce the Fed's overnight target interest rate by at least a quarter of a percentage point.

Powell has pointed to a number of national surveys as evidence business confidence took a hit recently, particularly in May after President Donald Trump threatened to impose tariffs on Mexican imports unless his demands about tougher immigration enforcement were met.

Earlier today the Fed's chairman, Jerome Powell, signalled he would cut interest rates again for the first time since the Global Financial Crisis while, in the same breath, insisting the economy was basically OK.

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Markets have fully priced in a rate cut for the FOMC July meeting, with increased odds of a half-point cut, after Powell in two days of congressional testimony emphasized that risks from a global slowdown are growing.

Earlier rounds of US tariffs on trading partners including China had been dismissed by the Fed as of little macroeconomic importance, with central bankers in early May still anticipating its policy rate would remain unchanged for the rest of the year.

"Nearly all participants had revised down their assessment of the appropriate path for the federal funds rate over the projection period", said the minutes of the Fed's June 18-19 policy meeting released on Wednesday, adding "many participants indicated that the case for somewhat more accommodative policy had strengthened". The minutes may show how strong that sentiment has become. -China trade war and other issues that he suggested could point to a need for stimulus.

Powell will testify again on Thursday before the Senate Banking Committee.

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