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.
