The impact of hawkish comments from Fed speakers last week didn’t last long with the U.S. dollar dipping against most major currencies early Tuesday.

Fed’s Vice-Chairman Stanley Fisher grabbed the headlines yesterday after providing an optimistic outlook on the U.S. economy saying that the economy is close to meeting the central bank’s targets and that GDP growth is expected to pick up in coming quarters as investments recover from a surprisingly weak patch. His comments provided the dollar a boost on Monday to recover further from a 2-month low, however, markets seem not yet convinced on the path of normalising monetary policy and need confirmation from Chair Janet Yellen who is due to speak at Jackson Hole on Friday. Although she might provide a positive assessment on growth outlook, I’m afraid that investors who are expecting more clarity on the timing of the next rate hike will be disappointed, and thus the greenback is likely to remain under some pressure on the short run.

The Kiwi outperformed all major currencies, rising 0.8% against the U.S. dollar after RBNZ Governor Graeme Wheeler signaled that rates might not drop much further from current levels as ongoing cuts in interest rates would further inflame an already overheated property market. His speech was welcomed by carry traders who benefit from differentials in interest rates by borrowing a currency with low interest rates to buy a high yielding one. A break above 0.7341 (15-month high) could lead to further gains, but markets might be a little cautious ahead of Chair Janet Yellen’s speech on Friday.

Oil prices fell by more than 1% on both sides of the Atlantic after heavy losses on Monday. The impact of a production freeze agreement had been exaggerated over the past couple of weeks which sent prices from a bear into a bull territory in a matter of three weeks.  Speculators who were the major players of the most recent rally might find little reasons to add to their bullish bets now as fundamentals don’t seem to support further gains. Even if OPEC and other major producers like Russia agree to cooperate to freeze at current levels, this isn’t likely to have a much positive impact on prices as output is already at record high. I expect to see some consolidation on the short run with Brent to trade within the $45-$50 range but volatility to remain high.