Despite the recent comments from the Federal Reserve Bank chief, Janet Yellen, FX investors appear to still be awaiting for further clarity before they push the greenback any higher, as a result, the U.S. Dollar is struggling to extend yesterday’s rally. Market players will have the opportunity to gauge the Fed’s likely direction later today when three of the Fed governors are scheduled to speak; according to a client letter written by BNP Paribas analysts, the possible shift toward tightening policy is going to be carefully assessed from the words used by the hawkish Fed officials.
As reported at 11:08 a.m. (JST) in Tokyo, the EUR/USD pair traded at $1.3777, edging up and away from the 2-week trough at $1.3749; the pair is set to have fallen by about 1% for the week by the time trading concludes later today. The Euro is under some pressure from comments made by one of the ECB board members who said that he anticipated benchmark rates would remain at their current low levels for an extended period. The USD/JPY pair traded at 102.39 Yen, edging away from an earlier high of 102.69 Yen. The U.S. Dollar Index remains near to its recent peak and was last trading at 80.192 .DXY.
Factory Activity Improvement Offers Hope
Mixed data from the U.S. was, in part, blamed for the waning of the Dollar rally; however a rebound in the Mid-Atlantic’s regional factory activity gave investors some hope that the severe weather over the past few months was the cause for the dismal numbers in past readings and that, going forward, the data would continue to show steady improvement.