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On Monday, the U.S. dollar erased its recent gains from the week before following a decline in U.S. bond yields as the markets shifted their attention and became wary of the upcoming speech from new Federal Reserve Chairman Jerome Powell who would be having his first congressional testimony.

The U.S. dollar index was 0.9% higher during the past week have traded 0.1% lower against six other major currencies during the early trading session to 89.775. The dollar index recently recovered from a three-year low over the past two weeks due to reports of growing inflation in the United States. Growing consumer prices in the United States also pushed the dollar to trade higher against other other currencies.

The greenback was down by 0.3% to 106.61 against the Japanese yen on talks of Japanese exports selling the U.S. currency prior to the end of the month. The euro was also 0.1% higher against the dollar to $1.2308 from previously losing 1% on the market’s cautiousness regarding the upcoming general election in Italy next week.

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The U.S. 10-year Treasury yield slipped by 2.86% on Monday during the trading session in Asia coming from its previous decline from a four year high of 2.957. By last week the dollar has managed to trade above a three-year low from hitting its lowest since December 2014 over the past month.

The greenback has been pushed down by market concerns since the beginning of the year. These concerns include wariness of the market regarding the monetary policy as well as lack of updates from the U.S. Federal Reserve regarding its plans to announce interest rate hikes this year.

During the most recent trading session, while the markets are not expecting Fed Chair Jerome Powell to announce interest rate hikes soon, his current outlook or view on the economy is set to affect the movement of the currency.

Powell is set to give his testimony on the central bank’s monetary policy and economy semi-annual report. Powell is set to speak before the U.S. House of Representatives Financial Services Committee.

While the markets are not expecting a rate hike soon, the minutes of the most recent Federal Reserve meeting has revealed that the Fed is still on track and is considering more rate hikes this year. However, any comments whether direct or indirect being made regarding the rate hikes on a light but positive note is set to push the dollar higher.

Despite the recent bullish run of the greenback, analysts have warned against the possibility of dollar’s upbeat movement running out soon which may soon turn into the downside.

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