US Dollar rebounded on Yellen comments

US Dollar rebounded on Yellen comments 
March 20.2014

The dollar traded near two-weeks high against a basket of major currencies on Thursday, after comments from Federal Reserve head Janet Yellen prompted, which renewed investors’ hopes and expectations to U.S. interest rate increasing.
Janet Yellen said the U.S. central bank might end its bond-buying program this autumn, which was sooner than many market participants had anticipated and the bank may start raising the interest rates six months later. Indeed, the FOMC statement’s opening paragraph mentioning the slower growth but Yellen immediately blamed the weather. This shows that the Fed is not too worried about the slowing growth in US.

However there are many other facts that pushed the Fed to taper further, the most important is the stronger jobs report recorded recently. Lower unemployment forecasts: the big difference in the accompanying economic forecasts lies in the decrease of the unemployment forecasts.

On the other hand, Yellen comments have also affected the precious metals like gold and Silver. Accordingly the Gold hit its lowest level in three weeks, as the rebound of the Dollar hurt the metal's safe haven appeal as a hedge against inflation. Also different currencies like the USD/CAD, the USD/JPY … and other cross currencies rose significantly after the Fed outcomes.


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