The U.S. dollar was trading near flat on Wednesday in Asia, while the Aussie dollar inched up despite weaker-than-expected GDP data.
The U.S. dollar index was little changed at 96.990 by 1:16 AM ET (05:16 GMT) after U.S. Federal Reserve Chair Jerome Powell hinted at the possibility of an interest rate cut in light of slow economic growth and trade tensions.
"We don't know how or when these issues will be resolved," Powell said. "As always, we will act as appropriate to sustain the expansion, with a strong labor market and inflation near our symmetric 2% objective."
Traders have been watching closely for signs the Fed could ease up on its monetary policy in light of inflation. St. Louis Federal Reserve President James Bullard said on Monday that an interest rate cut could be warranted in light of recent circumstances.
The AUD/USD pair edged up 0.1% to 0.6996 despite data that showed the country’s first quarter GDP came in at a softer-than-expected 0.4% quarter-on-quarter. Markets expected a 0.5% increase.
Year-on-year, GDP growth was at 1.8%, in line with expectations.
The Reserve Bank of Australia slashed benchmark cash rates to a record low of 1.25% on Tuesday and suggested willingness to cut further if outlook continue to worsen.
The USD/CNY pair inched up 0.1% to 6.9110 as traders await more trade-related news. U.S. Treasury Secretary Steven Mnuchin is set to meet with the People’s Bank of China governor Yi Gang during the Group of 20 gathering of finance ministers and central bankers in Japan over the weekend, the Treasury Department said on Tuesday night.
The GBP/USD pair was up 0.1% to 1.2706. The currency pair received some support following reports that U.S. President Donald Trump was committed to a trade deal with the U.K. after it leaves the European Union. Trump is in the U.K. on a state visit.
The USD/JPY pair slipped 0.1% to 108.06.
