FOREX-Dollar mostly steady before Yellen, up against yen reuters/article/2014/07/14/markets-forex-idUSL2N0PP0T620140714 * Dollar index trades tightly in low turnover * Treasury yields up * Feds Yellen to testify at Congress on Tuesday, Wednesday NEW YORK, July 14 (Reuters) - The dollar inched up against the Japanese yen on Monday but was little changed against other major currencies as investors awaited congressional testimony by Federal Reserve Chair Janet Yellen on U.S. monetary policy. The dollar was up 0.2 percent against the yen at 101.58. The euro also rose 0.25 percent against the yen, to 138.26 yen, recovering from last weeks five-month low of 137.50 yen. The euro, which has been trading steadily against the dollar at around $1.36, was nearly unchanged at $1.3611 after European Central Bank President Mario Draghi cautioned lawmakers that a strong euro could drag on a euro zone economic recovery. The U.S. dollar index of six currency trading pairs was up slightly at 80.202 as U.S. Treasury yields perked up. U.S. Treasury yields have mostly declined in recent weeks and Fed Funds futures show investors are pushing back policy tightening expectations following Fed minutes released last week that suggested the central bank was in no rush to hike rates. Much will depend on what Yellen says during congressional appearances set for Tuesday and Wednesday, particularly since U.S. data in the second quarter has signalled a strengthening economy. The key is U.S. yields, and if they are not moving higher, its unlikely to translate into anything substantial for the dollar, Commerzbank currency strategist Peter Kinsella said. Volatility is low and nothing - not Ukraine, Banco Espirito Santo - seems to be enough for people to take big positions. Yellen will move the market for five minutes, and that will be all. Currency traders are also looking for clues on macroeconomic trends and will focus on the Empire State Manufacturing Survey on Tuesday and Philadelphia Fed Survey on Thursday. The Empire State and the Philly Fed surveys will give us our first read of the third quarter. That will be more important than confirming a strong second quarter.
Posted on: Tue, 15 Jul 2014 09:20:55 +0000