With the eyes of the world’s investors focused squarely on Washington, D.C., Federal Reserve Chairman Janet Yellen reiterated that, for the time being, the central bank would maintain its current ultra loose monetary policy. However, it was a single comment which offered some hope to Dollar bulls when she said that though the recent labor and inflation data was positive overall it did not warrant an immediate change, however, if there continued to be accelerated improvements in the labor market that a change in policy with a rate hike could be considered.
As reported at 10:08 a.m. (JST) in Tokyo, the U.S. Dollar Index had edged higher by 0.3% to 80.388 .DXY. The EUR/USD hit a 1-month trough at $1.3562 while the USD/JPY struck a 1-week peak at 101.67 Yen.
Sterling Pushes Higher on BoE Rate Hike Bets
The GBP/USD was pushed to a 6-year peak at $1.7190 after the release of unexpectedly strong inflation data and growth in U.K. housing prices raised speculation that the Bank of England could raise its benchmark rates before the end of 2014. Housing prices rose to its fastest level in several years, and given the BoE’s recently expressed concerns of an overheating housing sector, analysts expect that Mark Carney will be unable to dismiss this consideration.