Yesterday brought Fed Chair Jay Powell's testimony in front of Congress. Ulrich Leuchtmann, Head of FX and Commodity Research at Commerzbank, analyzes Powell’s remarks.

Powell sounded at most as hawkish as he had done two weeks ago

Powell sounded at most as hawkish as he had done two weeks ago. That might not have been on purpose and due to the fact that Powell had to defend the pause in the rate cycle a number of times (which had been announced two weeks ago). To do that he had to use arguments that sounded rather dovish. However, whether it was on purpose or not: if at the same time other FOMC members make clearly dovish comments that is the perfect environment for USD weakness. That might be exaggerated, as there are also differing comments from among FOMC members who sounded more hawkish, but that is the view I am currently taking. At least as far as EUR/USD is concerned.

The fact that the Dollar is particularly susceptible to bad news can be interpreted as meaning that a strong USD is no longer consensus amongst market participants.