FILE PHOTO: US dollar banknotes are pictured in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/File

By Ankur Banerjee and Alun John

SINGAPORE/LONDON, March 7 (Reuters) – The dollar was flat on Tuesday ahead of Federal Reserve Chairman Jerome Powell’s testimony to Congress, while the Australian currency fell after the Reserve Bank of Australia hinted that it could be about to end with monetary tightening.

* The Australian dollar was the fastest moving currency in the G10, falling 0.79% to $0.6679, its lowest since late December, despite the central bank raising its interest rate , as and as expected, by 25 basis points, to 3.60%, the highest level in more than a decade.

* However, the Reserve Bank of Australia (RBA) changed a reference to further rate “hikes”, saying instead that “greater tightening” would be needed, suggesting the bank may be nearing the end of its cycle of increases.

* “A first look at the RBA’s statement suggests they are nearing the end of the tightening cycle and perhaps a step closer to a public discussion of a pause,” said Matt Simpson, senior market analyst at City Index.

* On the other hand, the euro, the pound sterling and the yen remained stable, with the common currency at 1.0671 dollars, the pound at 1.20245 dollars and a dollar at 135.7 yen.

* For its part, the dollar index, which compares the greenback to a basket of six major currencies, also traded flat at 104.3 units, after losing 0.26% the day before. So far this month, the measure has lost 0.6%, after rising 2.8% in February.

* On Tuesday and Wednesday, investors’ attention will focus on Powell’s testimony before Congress, while the February nonfarm payrolls report will be released on Friday.

* “Today’s semi-annual evidence will be important in determining whether the dollar can regain bullish momentum in the week ahead,” said MUFG analyst Lee Hardman.

(Reporting by Ankur Banerjee and Rae Wee in Singapore and Alun John in London; editing in Spanish by Carlos Serrano)

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