US dollar gained ground in European trade after a two-day hiatus ahead of Fed Chair Jerome Powell's Congressional testimony. 

The Index

The dollar index rose 0.5% today to 104.95, with a session-low at 104.39. 

The index closed down 0.1% yesterday, the second loss in a row off 20-year highs at 105.79. 

Powell's testimony

Fed Chair Jerome Powell is testifying ahead of the Senate later today, and will provide clues on the future of monetary policies. 

The Fed took a historic decision last week by hiking rates by 75 basis points 1.75%, the highest such hike since 1994.

Estimates 

If Powell sounded bullish remarks, and hints towards another 0.75% hike this year, it'll no doubt drive both US yields and the dollar higher. 

A gallon of gasoline in the US now costs $5, a record high, which worried the White House considerably as inflation overall hits 1981 highs. 

Analysts now believe the high prices constitute a genuine political challenge for the administration as it fails to present real solutions. 

Opponents of Biden accuse him of triggering higher gasoline prices by impeding oil pipelines and rigging operations, while obviously the Russian invasion of Ukraine played a major role in the crisis. 

The US government now expect gasoline prices to hold above $4 for the foreseeable future. 

To combat it, the administration is trying to take a slew of crucial measures. 

Emergency Steps 

President Biden already ordered the withdrawal of millions of barrels of the country's strategic reserves to support supplies. 

He extended his support for alternative energy sources such as solar and electric car usage. 

Now reports indicate Biden might issue a suspension of the gasoline federal tax valued at 18.4 cents per gallon. 

It's mostly viewed as a political move to calm down angry feelings in the opposition. 

Pressures

Seven major oil companies will convene with Biden tomorrow under pressure from the White House to control prices as they mark record profits. 

However analysts doubt the usefulness of such moves to control inflation in the near term. 

Gold prices declined in European trade for the fourth straight session as the dollar index gains ground against major rivals ahead of Fed Chair Powell's testimony. 

Prices Today

Gold prices declined 0.5% today to $1,823 an ounce, after losing 0.2% yesterday, the third loss in a row on slow demand on the precious metal. 

The Dollar

The dollar index rose 0.5% after a two-day hiatus from gains against a basket of major rivals. 

a Higher dollar weighs heavily on gold prices and other dollar-denominated metals. 

Fed Chair Jerome Powell is testifying today ahead of Congress to provide more clues on the future of interest rates. 

The Fed took a historic decision last week by hiking rates by 75 basis points 1.75%, the highest such hike since 1994. 

Estimates 

Analysts now expect to head towards the barrier of $1,800 and possibly slide below it in the next few weeks if the Fed maintained bullish remarks. 

The SDPR 

Gold holdings at the SPDR Gold Trust fell 1.74 tones yesterday to a total of 1,073 tones. 

Sterling declined in European trade against dollar for the third straight session following UK inflation data. 

UK inflation data indicated inflation is rounding off its peak, which is cutting bets on BoE rate hikes by 50 basis points. 

Prices 

GBP/USD fell 0.9% to 1.2160, after rising 0.2% on Tuesday, the second profit in a row as dollar slows down. 

UK inflation

UK consumer prices rose 9.1% in May, the fastest such increase since 1989, matching estimates, and up from 9.0% in April.

Core prices, excluding food and energy, rose 5.9%, missing estimates of 6.0%, and down from 6.2% in April.

The core prices have dampened bets on an accelerated pace of BoE rate hikes this year. 

The Dollar

The dollar index rose 0.5% after a two-day hiatus from gains against a basket of major rivals. 

Fed Chair Jerome Powell is testifying today ahead of Congress to provide more clues on the future of interest rates.