Yellen to speak: stocks up, dollar sluggish
The dollar was stuck near its lowest level in more than a year against the euro on Wednesday as shares rose in light markets before Janet Yellen’s testimony to Congress.
While the Federal Reserve chairman is expected to hold the Fed on a steady course of steady rise in speed, signals on how the bank sees a decline in inflation and rising silent wages will be monitored.
Two-day comments from two colleagues requesting a warning about increases in additional interest rates have pushed the likelihood of a rise before the end of the year to 50 percent, according to CME monitoring data.
“Yellen’s testimony remains the key event risk in today’s session but we remain optimistic about the dollar’s outlook and we are a long position against the library is the best way to realize this view,” said Adam Cole, head of foreign exchange strategy at RBC Capital Markets in London.
The pound hit a two-week low against the dollar and deepened to fall to its lowest level in eight months against the euro on Wednesday after Bank of England Deputy Governor Ben Broadbent said he was not ready to Raise interest rates.
A weighted BlueChip UK index, which rose 0.7 percent, outperforming its regional peers.
European shares rose 0.5 percent with all sectors of the green.
US stocks took a brief bang on Tuesday on Wall Street after e-mail. President Donald Trump’s eldest son met with a Russian lawyer for his father’s election campaign in 2016 against Hillary Clinton.
But at the close of the session, Wall Street shares had regained their losses.
Exclusive: Saoudis to cut oil exports in August to its lowest level this year – source
Trump saw Yellen to replace Fed with Cohn NEC: Politician
The dollar was flat against a basket of major currencies and was close to its lowest level since last May against the euro.
In commodity markets, oil prices were suppressed by concern over oversupply after the US government cut its forecast for gross output for next year and fuel stocks have plummeted.
Brent crude oil futures contract rose 1.3 percent, while US crude futures contracts West Texas Intermediate (WTI) rose 2 percent.