Dollar edges lower as investors await Yellen testimony

Feb 15, 2017, 00:34
Dollar edges lower as investors await Yellen testimony

Yellen, during prepared remarks before the U.S. Senate Banking Committee Tuesday said that "gradual increases in the federal funds rate will likely be appropriate".

Despite much money printing by the United States central bank inflation has only recently started to rise; how much it does, and how quickly, is a big factor influencing when the Fed will put up interest rates.

Federal Reserve Chair Janet Yellen goes to Congress on Tuesday for the first time since Republicans took control of the White House and both houses of the legislature with less clarity on the direction of US economic policy than at any time of her three-year tenure.

"Changes in fiscal policy or other economic policies could potentially affect the economic outlook", she said.

A demonstration of how much optimism is feeding into markets: Small-business owners say they haven't felt this encouraged in 12 years, according to a monthly survey released by the National Federation of Independent Business on Tuesday. The benchmark 10-year Treasury note rose to 2.5 percent during her testimony from 2.43 percent, although it dipped a bit later.

"I see well-capitalized banks that are regarded as safe, sound and strong", Yellen said, adding this gives them a "competitive advantage". "The markets over-reacted".

It had kept its main lending rate near zero for seven years. before raising it in December 2015 and again last December. At the moment, the federal funds rate is in a range of 0.5% to 0.75%. (In December, the Fed forecast that it would raise rates three times in 2017.) But lawmakers are sure to press her also to spell out how the Fed might react to the ambitious economic program President Trump is preparing to unveil in the coming weeks.

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He is averaging 10.4 points, 2.6 rebounds, 0.8 assists, 1.0 steals and 1.8 3-pointers in 54 games this season. Toronto went 56-26 last season and finished a game behind the Cleveland Cavaliers in the Eastern Conference.

The exam, known as the Comprehensive Capital Analysis and Review (CCAR), is just one of two studies that the central bank conducts yearly.

"Technological change has generally been a source of income growth, but has also created huge disadvantages for those with less education, and those in manufacturing industries that have seen outsourcing from globalization and automation", she said. The upshot: A rate increase in March is "quite viable - depending on the data and markets developments over the next month, of course", he wrote.

Yellen did warn about delaying rate hikes: "Waiting too long to remove accommodation would be unwise".

Paul Ashworth, chief USA economist at Capital Economics, noted that Congress' deadlock over revamping or axing Obamacare showed that "fiscal stimulus could now be delayed for some time".

March futures on three-year treasury bonds lost 0.02 point to 109.50.

"But a few Japanese exporters are selling dollars at the moment, disappointed that it didn't go even higher after the weekend meeting" of U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe, who apparently did not discuss currency policy or trade protectionism, Ogino said.