The safe-haven dollar rose from a three-week low on Wednesday, as investors grew cautious about USA trade talks with China after the country's trade representative said there are still serious issues to work through to secure a deal and ensure that future agreements are met.
In his report to Congress, Powell repeated assurances the Fed has been making since January that it plans to be patient in deciding the next moves on interest rates.
But the Green New Deal advocate and Bronx populist asked no questions during the debate, and much of what Powell said on Wednesday repeated comments made Tuesday to the Republican-controlled Senate Banking Committee, including that the economy is on solid ground and the Fed would be patient on raising rates.
In its January meeting, the US central bank halted its plans for further rate hikes, adding that it would be "patient" on raising rates amid muted inflation and rising risks to global economic growth. But many private economists believe the central bank may keep rates unchanged all year, reflecting expectations that the economy will slow significantly.
"We are close to agreeing on a plan that would sort of light the way to the end of the process", Powell said. "$1,300- $1,400 should be very reasonable price range for this year".
Powell said the Fed saw muted inflation pressures, even now with historically low unemployment, and an ongoing recovery in the labor market.
Powell said, "While we view current economic conditions as healthy and economic outlook as favorable over the past few months, we have seen some crosscurrents and conflicting signals".
Among the liabilities of the central bank, currency in circulation totaled $1.7 trillion at the end of 2018, more than double the amount 11 years earlier.
Powell said the Fed's policy decisions will depend on economic indicators and the future outlook.
"We going to be in a position.to stop runoff later this year", he said, adding that doing so would leave the balance sheet at about 16 percent or 17 percent of GDP, up from about 6 percent before the financial crisis about a decade ago.
"We will carefully monitor these issues as they evolve", he said.
He cited the financial markets becoming more volatile toward year-end, financial conditions proven less supportive of growth than they were earlier a year ago, as well as slowing growth in some major economies.
Powell said the United States faces "important longer-run challenges".
Investors will be keeping an eye on the U.S.