The dollar was broadly lower against a basket of other major
currencies on Wednesday after Federal Reserve Chair Janet Yellen
appeared to indicate that the bank is in no hurry to raise interest
rates.
Fed Chair Yellen said in a prepared speech to the Senate Banking Committeeit was “unlikely” that economic conditions would warrant an interest rate increase for “at least the next couple of FOMC meetings”. She added that if the economy keeps improving as the Fed expects it will modify its forward guidance, but emphasized that a modification of its language should not be read as indicating that a rate hike would automatically happen within a number of meetings.
The remarks prompted investors to push back expectations for a mid-year U.S. interest rate hike.
EUR/USD was last up 0.12% to 1.1354 after rising as high as 1.1388 earlier.
The euro remains vulnerable as continuous doubts over the agreement to extend Greece’s bailout by four months kept investors cautious. Greece's creditors, in particular the International Monetary Fund and the European Central Bank, warned Tuesday that Greece’s reform plans are not detailed enough and said Athens will need to do more to secure the release of further bailout funds.
The greenback declined against the yen and the Swiss franc, with USD/JPY slipping 0.12% to 118.80 and USD/CHF easing to 0.9494.
The pound sterling rose to two-month highs, with GBP/USD up 0.28% to 1.5496 on positive data on U.K. mortgage approvals.
The commodity-linked Australian and New Zealand dollars rose after data earlier showed that Chinese factory activity edged up to a four-month high in February.
NZD/USD was up 0.83% to 0.7553, while AUD/USD added 0.62% to trade at 0.7879.
The Canadian dollar also gained ground, with USD/CAD down 0.46% to 1.2428.
