The dollar nursed losses near a six-week low on Tuesday while commodity currencies loitered around multi-year highs, as investors’ focus shifted to how U.S. Federal Reserve chief Jerome Powell might respond to resurgent inflation expectations. Surging prices for materials from oil and copper to lumber and milk powder have pushed currencies such as the Australian and New Zealand dollars to their highest in nearly three years. However the gains have come with a worldwide rise in inflation expectations and a big sell-off in longer-dated bonds. Traders expect Powell, who testifies before Congress at 1500 GMT, to provide some reassurance that the Fed will tolerate higher inflation without immediately hiking rates, which they said could calm bond markets and eventually weigh on the dollar. “I think he will talk up the downside,” said Commonwealth Bank of Australia currency analyst Joe Capurso in Sydney. “If anything, I think he will give markets a bit of a cold shower and say: ‘Mr Market you’re getting a bit ahead of yourself. There are plenty of risks...and the U.S. economy is long, long way from full employment.’” Morning moves were slight ahead of his appearance, but renewed confidence that low U.S. interest rates will not lift anytime soon can likely clear the way for further gains in trade-exposed currencies at the dollar’s expense. The U.S. dollar index sat at 90.019 on Tuesday, just above its lowest since mid January. The Australian dollar last bought $0.7913 and the kiwi $0.7323, with both trading broadly steady early in the Asia session. The euro made a small gain to $1.2165 and is poised to re-test resistance around $1.2220. Sterling, which has rallied nearly 3% this year as a speedy vaccine rollout has inspired confidence in the prospect of a British economic rebound, held above $1.40 at $1.4067. The Japanese yen, which has been the worst performing major currency of 2021 because it is sensitive to tumbling U.S. Treasury prices, steadied at 105.02 per dollar. Elsewhere bitcoin steadied above $50,000 after a wild overnight ride where it traded in a $10,000 range and dropped as low as $47,400.