News Column

Dollar Steady As Attention Shifts To Yellen

July 14, 2014

WASHINGTON (Alliance News) - The dollar was little changed for a second day on Monday, as traders geared up for this week's semi-annual monetary policy testimony from Federal Reserve Chair Janet Yellen.

Yellen takes to Capitol Hill on Wednesday, and markets will be hoping for some clues about when the Fed may begin a tightening cycle.

Current projections say the Fed won't raise rates until well into 2015, but a recent string of encouraging news on US jobs and signs of inflation could pressure the central bank to act sooner.

Markets were generally upbeat Monday as Portugal's wobbly banking system was seen stabilizing.

The dollar was stuck at USD1.3612 versus the euro despite some lackluster economic data from the euro zone. The pair has been holding around USD1.36 for the past few weeks.

Eurozone industrial production declined in May for the second time this year, according to estimates published by Eurostat.

Output fell 1.1% from the previous month, reversing a 0.7% rise in April. Economists expected output to decline 1.2%.

The buck continued to improve a bit versus the sterling, rising to USD1.7074. A 5-year low near USD1.72 was seen earlier this month.

UK inflation data will be eyed later this week, as the Bank of England weighs whether to raise rates in the coming months.

Meanwhile, gradual gains took the dollar to Y101.50 versus the yen as risk aversion waned.

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Source: Alliance News

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