USD likely to suffer considerable losses

The semi-annual testimony of Fed chair Janet Yellen in front of Congress is due today. She is likely to use the opportunity to further prepare the market for the fact that a first rate hike before the end of the year is quite possible. Similar remarks last week initially put a stop to the downtrend in rate expectations. 

However, market scepticism remains high. Disappointing consumer prices, due for publication ahead of today's hearing, in particular are likely to have an effect, as Yellen is likely to repeat once again that the Fed will first have to be certain that inflation is approaching its target before it can raise interest rates, says Commerzbank. 

However, as Yellen will not want to dampen rate expectations any further there is little to suggest that USD will have to suffer considerable losses even if the data disappoints, adds Commerzbank.