The US Dollar recovered in Wednesday trading, halting the five days of declines as investors await a speech by the Federal Reserve chief, Janet Yellen. The hope is that Ms. Yellen will provide some hints for the timing of promised interest rate hikes. Analysts blame the Dollar’s recent decline on comments made by the President-elect who talked of the trade difficulties faced by US companies relative to China, given the too strong Dollar. On the whole, however, according to some strategists, Trump’s impact on the Dollar is tempered by a growing awareness that he has very little understanding of foreign exchange markets, so his talk about China’s manipulation of the Yuan is, in large part, not taken as credible.
As reported at 10:12 am (GMT) in London, the EUR/USD was trading at
$1.0691, down 0.19%; the pair had earlier hit a trough of $1.0673 while the high was set at $1.0715. The GBP/USD was down 0.74% to trade at $1.231 while the session’s low was established at $1.2303 and the high at $1.2415. the USD/JPY was higher at 113.239 Yen, a gain of 0.45%; the pair ranged from a low of 112.2500 Yen to a peak of 113.4300 Yen.
Rate Hike Argument in Place
Later today, Janet Yellen will be speaking in San Francisco and markets are awaiting some clues. On Tuesday, the Fed’s San Francisco branch president said that even without Trump’s promised fiscal stimulus there was still a good case for more rate hikes in 2017. If, he said, the economy grew at a faster pace, then perhaps more rate increases could be warranted. Markets are awaiting inflation data for the US to be released later today which could impact the Dollar.