Dollar Mostly Lower After Yellen Speech and Other Top Forex News.
The dollar remained in negative territory against most of the major currencies on Tuesday, falling to two week lows against the euro but strengthening slightly against the yen after Federal Reserve Chairman Janet Yellen confirmed that the U.S. central bank remains on track to reduce its stimulus program.
During this mornings speech before the House Financial Services Committee, Yellen said that the central bank would taper the pace of its asset purchases at future meetings if the economy continued to improve as expected.
She added that the pace of the central bank’s bond purchases are not on a “preset course”, while reiterating that Fed plans to hold interest rates at zero “well past” the time the jobless rate falls below 6.5%.
Ms. Yellen said that “the recovery in the labor market is far from complete,” despite progress made in the last year, with the unemployment rate, currently at 6.6%, still “well above levels” that Fed officials consider sustainable by a healthy economy.
After the speech the dollar rose moderately against the yen jumping as high as 102.71 yen from a low of 102.33, before closing at 102.65, up 0.37% for the day.
While the euro pulled back from session highs against the dollar after Yellen’s speech. EUR/USD hit a high of 1.3684, the highest level since January 29, before falling back to 1.3638 at the close, up 0.05% for the day.
And the pound pushed higher against the dollar climbing to a session high of 1.6488, ended the session up 0.31% at 1.6451.
Elsewhere, the Australian dollar strengthened after a report showed that the National Australia Bank’s business conditions index rose for the first time in four months in January, while its business confidence index also improved.
A separate report showed that house prices rose in the fourth quarter. The upbeat data reinforced the view that the Reserve Bank will hold back from further rate cuts for now.
AUD/USD ended the session up 1.03% to 0.9042.
The New Zealand dollar was also higher, tracking the Aussies gains. NZD/USD ended the session up 0.78% at 0.8330.
Finally, the Canadian dollar found support later in the session after Yellen’s comments softened the dollar. USD/CAD slipped 0.40% to 1.1043 at the close of the U.S. session.
More coverage of today’s session.
- FT: Janet Yellen pledges ‘continuity’ in Fed monetary policy. – Janet Yellen will start her term as US Federal Reserve chairwoman with dovish testimony to Congress, pledging “a great deal of continuity” in monetary policy and saying there is “more to do” to restore the economy to health.
- Telegraph: Janet Yellen: Fed policy will not change dramatically on my watch. – New chairman uses first address to reassure investors, saying she expects ‘a great deal of continuity’ in policy.
More Top Stories:
Forbes: It’s the euro, stupid. – A few days ago the German constitutional court referred the question of the legality of the ECB’s Outright Monetary Transactions (OMT) to the European Court of Justice (ECJ), claiming that the ECB was straying into fiscal policy that was beyond its mandate and that OMT breached EU treaty directives outlawing monetary financing of governments.
FT: EM currencies rally after dovish Yellen comments. – Emerging market currencies continued to rally against the US dollar on Tuesday, boosted by some dovish statements made by Janet Yellen at her first public appearance as US Federal Reserve chairwoman.
WSJ: Canadian dollar slips after remarks from U.S. Fed’s Yellen. – The Canadian dollar is flat Tuesday, ceding its gains earlier in the session after remarks from U.S. Federal Reserve Chairwoman Janet Yellen sparked a general advance in the U.S. dollar against other major currencies.
WSJ: Dollar rises against yen after Yellen comments. – The dollar rose against the Japanese yen on Tuesday after Federal Reserve Chairwoman Janet Yellen’s prepared remarks emphasized continuity in the central bank’s approach to monetary policy.
WSJ: New Zealand dollar gains against greenback after improving Aussie data. – New Zealand–The New Zealand dollar was higher against the U.S. dollar late Tuesday, boosted by gains for the Australian dollar after data pointed to improving business confidence there.
Bloomberg: Gold futures head for longest rally since 2012 on Yellen remarks. – Gold headed for the longest rally since August 2012 as Federal Reserve Chairman Janet Yellen said more work is needed to restore the labor market, signaling monetary policy will boost demand for alternative assets.