The U.S. dollar slipped lower in early European trade Tuesday, consolidating after recent gains ahead of a key speech from Fed Chair Jerome Powell, while the Australian dollar surged after the Reserve Bank hiked interest rates.

At 03:00 ET (08:00 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% lower at 103.445, just off its recent one-month high.

The index pauses after recovering from Friday’s strong jobs report, which prompted traders to revise their forecasts for how much Federal Reserve interest rates will need to rise to keep control. inflationary.

Attention now turns to a speech by Federal Reserve Chairman Jerome Powell at the Economic Club of Washington late Tuesday.

“Fed Chairman Jerome Powell at his post-FOMC press conference last week described a potential ‘Goldilocks’ scenario in which inflation falls without a significant increase in unemployment.” ING analysts said in a note. “We’ll see how much confidence he has in this scenario.”

Elsewhere, AUD/USD rose 0.7% to 0.6929 after the Reserve Bank of Australia raised its cash rate by an expected 25 basis points, but also signalled further rate hikes ahead.

“Further increases in interest rates will be needed over the months ahead to ensure that inflation returns to target and that this period of high inflation is only temporary,” RBA Governor Philip Lowe said in a statement.

EUR/USD traded 0.1% lower at 1.0719, struggling to benefit from dollar weakness, having slid to 1.0709 in the previous session, the lowest since Jan. 9.

German industrial production fell more than expected in December, decreasing by 3.1% on the previous month, data showed earlier Tuesday, instead of the expected drop of 0.7%.

GBP/USD rose 0.1% to 1.2026, after tumbling to a one-month low of 1.2006 in the previous session.

Britain’s housing market stabilized in January, ending four months of decline, with mortgage lender Halifax calling property prices unchanged last month after a 1.3% drop in January.

USD/JPY fell 0.4% to 132.15, but the pair remains near Monday’s one-month high of 132.90 as speculation remains rife over who will be the next Bank of Japan Governor, with Reuters reporting that the candidates to succeed incumbent governor Haruhiko Kuroda will be presented by next week.

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