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Dollar holds gains after mixed data, Yellen's testimony eyed

February 27, 2014

The U.S. dollar traded higher versus a basket of major currencies, holding its earlier gains, after durable goods and jobless claims reports, with focus now shifting to Yellen's testimony. U.S. initial jobless claims soared to 348,000 in the week through February 22 from a revised of 334,000, above forecasts of 335,000.   Another important report showed that durable goods fell 1.0 percent in January, better than estimates of 1.7 percent drop. The reading excluding transportation advanced 1.1 percent, defying analysts' predictions of 0.3 percent slump. The main concentration remains on U.S. data as investors aim to get clues about the future of the Fed's stimulus taper.   However, the main focus would shift to Yellen's testimony as she may give some hints about the plan for stimulus taper after the recent setback in economic data, which raised concerns recovery may be faltering. The dollar index, which tracks the dollar's movements versus a basket of major currencies, is currently hovering around 80.80 after hitting a high of 80.59. The EURUSD is meanwhile trading lower around 1.3658 after hitting a high of 1.3694 and a bottom of 1.3642. The euro failed to benefit from today's report which showed euro area economic confidence climbed to the highest level since July 2011 in February. Tomorrow, eyes will focus on euro area economic unemployment and inflation data. The GBPUSD resumed its drop for a second straight session to trade around 1.6648 after falling to a low of 1.6615. Versus the yen, the dollar slipped to pull the pair down to a low of 101.72 while it is currently trading around 102.06.

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Source: Financial Markets

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