The US dollar traded sideways as comments of Federal Reserve Chairperson Janet Yellen were received with a mixed reaction by the Forex market. The currency demonstrated strong gains against the euro for two consecutive sessions.
On one hand, Yellen reiterated that interest rates are likely to stay low for a prolonged period after monetary stimulus will be removed. On the other, the Chairwoman said that monetary tightening may occur sooner if the labor market continues to improve at a stable rate. All in all, Yellen’s testimony was fairly optimistic:
I do think the economy is recovering and that growth is picking up. We have sufficient growth to support continued improvement in the labor market.
As for economic data from the United States, it was not particularly good this week. The notable exception was the Empire State Manufacturing Survey, which showed unexpectedly strong growth of the sector.
EUR/USD dropped from 1.3567 to 1.3525 before trading at 1.3530 as of 00:48 GMT today. GBP/USD traded at about 1.7138, while USD/JPY was near 101.64, both currency pairs being not far from the opening.
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