Dollar Advances after Fed Chair Yellen Addresses Lawmakers

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Dollar Advances after Fed Chair Yellen Addresses LawmakersThe dollar surged versus its major counterparts after the Federal Reserve Chair Janet Yellen spoke to lawmakers, revealing that the U.S. economy is headed in the right direction though there is still some considerable slack in the job market.

The dollar advanced 0.1 percent to trade at 101.65 yen in late morning trading in New York after earlier surging by the strongest margin since July 3 on Monday. The greenback advanced 0.3 percent to $1.3577 per euro after rising to $1.3562, the highest level since June 18. The yen appreciated 0.2 percent to trade at 137.97 per euro.

“Yellen’s speech was absolutely dovish at the outset, and the reflection seems to be on that sentence about overstretched valuations on biotech, social media, small-caps,” Andrew Wilkinson, a Greenwich, Connecticut-based chief market analyst at Interactive Brokers LLC, said told Bloomberg. “She seems to be tempering expectations somewhat and we very quickly turned to risk-off, which seems to be suiting the dollar.”

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The pound advanced 0.4 percent against dollar after the London-based Office for National Statistics reported that consumer prices in UK surged 1.9 percent in June, compared with 1.5 percent in May. The sterling rose to $1.7192, the strongest level since October 2008. It also accelerated 0.7 percent to trade at 79.13 pence per euro, the highest level since September 6.

The U.S. currency had earlier advanced after a report showed that retail sales increase in June while a Federal Reserve of New York’s manufacturing gauge rose in July.  The New York Fed Empire State Manufacturing Index grew to 25.60 in July, compared with 19.28 in June. The U.S. retail purchases grew 0.2 percent, compared with 0.5 percent in May, reported the Commerce Department. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com