Kantox currency update: dollar ticks down after Yellen
The dollar pulled down slightly on Wednesday after Yellen pointed out to “gradual” monetary tightening, at her semi-annual testimony to the Congress, which was interpreted by the investors as a sign of hesitation about hiking rates too fast in a moment of slowing down inflation.
Furthermore, the Bank of Canada hiked interest rates 25 basis points to 0.75% for the first time in seven years, boosting the Canadian dollar to a one-year high against the dollar, and increasing negative pressure on the greenback.
EUR/USD: steady above 1.1400. The euro retreated from mid-term highs at 1.1490 on Wednesday, to find support at 1.1390 and bounce up after Yellen’s testimony, returning to the mid-range of 1.1400. At London market opening times, the EUR/USD is trading at 1.1450.
GBP/USD finds support at 1.2800. Sterling’s reversal from last week highs near 1.3000 found support on Wednesday at 1.2800 area and the pair bounced up after Yellen’s testimony, returning to levels beyond 1.2900.. At London market opening times, the GBP/USD is trading at 1.2825.
USD/JPY: pulls back to 113.00 area. The dollar extended its reversal from 4-month highs at 114.50, retracing some of the last four weeks’ rally, and returning to the 113.00 area. At London market opening times, the USD/JPY is trading at 113.10
In the Calendar Today
Today, the main market focus will be again on Federal Reserve speakers.
At 14:00 GMT we will be attentive to the second session of Fed Yellen’s semi-annual testimony to the Congress. As we witnessed on Wednesday, any comments regarding the Fed’s monetary policy plans might move the dollar.
After Yellen, the speeches of Fed officials Evans and Brainard might also offer some insight about the Fed´s rate hike calendar and make an impact on dollar volatility.
14:00 GMT Fed: Yellen’s testimony
15:30 GMT Fed: Evans’ speech
17:00 GMT Fed: Brainards’ speech