US Dollar Rally May Resume as Fed Chair Yellen Speaks
- Aussie Dollar buoyed by upbeat data, Yen corrects upward
- US Dollar rally may resume after Fed Chair Yellen speaks
- Eurozone GDP, UK CPI figures may pass without fanfare
The Australian Dollar outperformed in overnight trade, buoyed by supportive economic data. The Japanese Yen likewise traded higher in a move that looked corrective after yesterday’s slump against the spectrum of G10 FX majors.
The US Dollar was also in digestion mode, edging lower against its top counterparts having advanced to a monthly high against a backdrop of rising Treasury yields and steepening Fed rate hike projections yesterday. That move appeared to reflect pre-positioning for upcoming commentary from Janet Yellen.
The FOMC Chair begins two days of testimony before members of Congress. If she hints that December’s projection calling for three rate hikes remains unchanged despite continued uncertainty about the trajectory of fiscal policy, the greenback’s push upward may resume.
UK CPI data headlines the economic calendar in European trading hours. The headline year-on-year inflation rate is expected to hit 1.9 percent, the highest since June 2014. That may not offer much of a lasting lift to the British Pound considering the BOE’s apparent reluctance to tighten policy however.
The same goes for a revised set of fourth-quarter Eurozone GDP figures. The ECB looks firmly committed to a dovish posture despite recent improvements in economic news-flow, suggesting the Euro will find it difficult to capitalize even if the data appears upbeat at surface level.
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** All times listed in GMT. See the full DailyFX economic calendar here.
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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