The U.S. Dollar remains range-bound as FX traders wait to hear what Janet Yellen, the head of the Federal Reserve Bank, will have to say at her testimony before the U.S. Congress which will take place later today. Yellen will appear today before the Senate Banking Committee and then the House of Representatives’ Financial Services Committee tomorrow and investors are hopeful that she will offer some hints as to the timing of the next interest rate hike, especially given the recent release of an unexpectedly strong labor report that suggested that there is strong positive momentum in the U.S. economic recovery.
As reported at 11:33 a.m. (JST) in Tokyo, the USD/JPY was trading flat at 101.5950 Yen, well away from the 7-week trough struck last week. The EUR/USD held at $1.3618, however FX players remain cautious after the ECB president warned that the Euro’s appreciation could hinder the region’s economic recovery, suggesting that more easing could be on the way.
Fed’s Dovish Bias Likely to Endure
Yellen, as well as other FOMC members, have continued to maintain a dovish posture and analysts say that anything other than that in her testimony could set off a minor rally. Recently, Janet Yellen had said in a media interview that the central bank’s monetary policy would remain unusually accommodative until the economy reaches some measure that the Fed has predetermined as the tipping point for a policy shift.