* GRAPHIC-World FX rates in 2019: http://tmsnrt.rs/2egbfVh
* 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 decade-long expansion.
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 rate cut.
"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 .DXY .
Against the yen, the dollar fell 0.4% to 108.43, dropping 0.5% against the Swiss
franc to 0.9892 franc CHF= .
The euro, meanwhile, rose 0.4% to $1.1252 EUR= .
========================================================
Currency bid prices at 2:55PM (1855 GMT)
Description RIC Last U.S. Close Pct YTD Pct High Bid Low Bid
Previous Change Change
Session
Euro/Dollar EUR= $1.1252 $1.1206 +0.41% -1.89% +1.1263 +1.1202
Dollar/Yen JPY= 108.4300 108.8400 -0.38% -1.66% +108.9800 +108.3600
Euro/Yen EURJPY= 122.00 122.01 -0.01% -3.34% +122.3200 +121.9800
Dollar/Swiss CHF= 0.9892 0.9934 -0.42% +0.79% +0.9941 +0.9888
Sterling/Dollar GBP= 1.2505 1.2465 +0.32% -1.98% +1.2520 +1.2445
Dollar/Canadian CAD= 1.3071 1.3125 -0.41% -4.15% +1.3143 +1.3064
Australian/Doll AUD= 0.6959 0.6927 +0.46% -1.28% +0.6969 +0.6911
ar
Euro/Swiss EURCHF= 1.1131 1.1135 -0.04% -1.09% +1.1145 +1.1121
Euro/Sterling EURGBP= 0.8996 0.8991 +0.06% +0.13% +0.9009 +0.8985
NZ NZD= 0.6642 0.6603 +0.59% -1.12% +0.6656 +0.6569
Dollar/Dollar
Dollar/Norway NOK= 8.5803 8.6505 -0.81% -0.68% +8.6637 +8.5706
Euro/Norway EURNOK= 9.6527 9.6960 -0.45% -2.56% +9.7129 +9.6492
Dollar/Sweden SEK= 9.4166 9.4712 -0.20% +5.05% +9.4799 +9.4087
Euro/Sweden EURSEK= 10.5978 10.6190 -0.20% +3.25% +10.6320 +10.5898