Dollar firm ahead of Powell testimony, sterling up on hot inflation

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• "Despite having paused last week, the Fed officials ... still surprisingly aggressively forecasted another 50 basis points in hikes by end 2023,"

• It also rose slightly on the euro and yen , as traders were betting the Bank of England would need to take rates higher. Markets now price another 150 basis points of hiking for a peak at 6% in a year's time.

• Elsewhere there was little appetite for a bounce from either the yuan or the Australian dollar, which have been battered by China's shaky economic recovery and lack of major stimulus.

• China set its yuan midpoint weaker than expected on Wednesday and the currency slid to a new seven-month trough of 7.1987 in onshore trade, while the offshore yuan weakened past 7.2 to the dollar.

• The Aussie had taken a further beating thanks to Tuesday's less-hawkish-than-expected central bank minutes following this month's rate hike. It fell 0.9% overnight and last bought $0.6786.