USA dollar falls on Yellen testimony

Amos Gonzales
July 14, 2017

In the Asian trading, the Australian dollar rose to almost a near 4-month high of 0.7746 against the US dollar and almost a 5-month high of 87.90 against the yen, from yesterday's closing quotes of 0.7728 and 87.55, respectively.

Low inflation remains a concern for USA economy, United States federal reserve chairman Janet Yellen warned on Wednesday, despite delivering an upbeat assessment of the U.S. economy.

The CPI, in particular, will garner interest because "if you take Yellen at her word the Fed is starting to second guess itself as to whether recent weakness is transitory", said ANZ Bank New Zealand senior economist Phil Borkin.

The Dow Jones Industrial Average jumped 123 points on Wednesday - a record high.

Asked if it would be possible to reach three percent over the next five years, Yellen said, "I think it would be quite challenging".

However, the core consumer price index (CPI) is forecast to have risen only 1.7 per cent year-on-year in June after a similar gain in May. The Brazilian real strengthened after former President Luiz Inacio Lula da Silva was convicted of graft and money-laundering, while Canada's dollar rallied on central bank tightening.

With speculation surrounding her future as Fed chairman, Ms Yellen told Congress the Fed was considering risks surrounding the outlook for price growth.

At the front-end of the curve, the two-year yield dropped as low as 1.331 percent from 1.379 percent on Tuesday and last traded at 1.3470 percent.

Visa plans to offer incentives to United Kingdom firms to go cashless
Card payments giant Visa is offering 50 small U.S. businesses a share of a $500,000 pot of money if they go totally cashless. The payments company is selecting 50 small companies in the USA to receive $10,000 if they only use cards, the BBC reports.

The Fed increased the interest rate for federal funds rate by 0.25 of a percentage point at its March and June meetings, bringing the target to a range of 1 to 1.25 percent.

The Canadian dollar edged higher against its U.S. counterpart, a day after the Canadian central bank raised interest rates for the first time since 2010.

-The Bloomberg Dollar Spot index fell 0.4 percent. The dollar index against a basket of major currencies was down 0.15 percent at 95.606 after retreating to as low as 95.511 the previous day, its weakest in 12 days.

The Russell 2000 is up 8.49 points, or 0.6 percent.

While the aussie rose against the USA dollar, the yen, and the euro, it fell against the NZ dollar.

-The loonie rose 1.4 percent to $1.27356.

The dovish sentiment from the Fed at the same time put the S&P 500 financials .SPSY , which tend to benefit from higher rates, last among sectors, ending with just a gain of 0.1 percent.

Other reports by BadHub

Discuss This Article

FOLLOW OUR NEWSPAPER