The dollar showed no clear performance against a basket of currencies on Wednesday, holding near a three-week low, while markets weighed comments from Fed Chairman Jerome Powell, who took a cautious stance during his annual speech to the US Senate yesterday. The New Zealand dollar is falling amid the prospect of a rate cut by the country's central bank.

Inflation remains above the Fed's 2% target, but the situation has been improving in recent months and a fresh round of upbeat data will bolster the case for the U.S. central bank to cut interest rates, Fed Chairman Jerome Powell told Congress on Tuesday.

Powell also said on Tuesday that in his speech to US lawmakers he was not sending any signals about the timing of interest rate cuts.

The dollar index against a basket of six major currencies DXY was little moving near 105.08 at 09:54 Moscow time after rising by about 0.1% on Tuesday.

"Powell was careful not to make promises to go down a path that could easily be swayed by a flood of data," said National Australia Bank's Taylor Nugent.

Kiwi NZDUSD fell 0.57% to $0.6088​, moving further away from Monday's three-week high of $0.6171, as New Zealand's central bank signaled it could cut rates if inflation slows as expected.

The regulator on Wednesday left the key rate unchanged at 5.5%, while noting that inflation is expected to return to the target range of 1%-3% in the second half of 2024.

Aussie AUDUSD rose 0.1% to $0.6747, continuing to trade close to Monday's six-month peak of $0.67615. (AUD/)

The euro EURUSD was little moved, holding at $1.082, below the nearly one-month high of $1.0845 the currency touched on Monday. Investors are mentally preparing for a possible political deadlock in France, which could end up with a hung parliament after a left-wing alliance unexpectedly won the second round of early elections.

The Japanese yen USDJPY was stable at 161.42. The currency pair is trading in a narrow range ahead of the Bank of Japan meeting at the end of July.

The Bank of Japan is likely to cut its growth estimate for 2024 in July but forecast inflation to remain at 2% in the coming years, keeping the chances of a rate hike at its next meeting, the sources said.

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