Dollar pressured by Yellen comments

Published: 14 Nov at 9 AM Tags: Euro, Dollar,

The dollar has been placed under increased pressure after Janet Yellen, Federal Reserve Chairman-elect, said the US economy and labour markets were still under-performing, while the jobless rate remained too high. Her comments have created fresh doubt that the central bank is about to scale back its massive bond buying policy.

The dollar index dropped to its lowest level in a week at 80.740. Pressure on the greenback helped the euro to jump from yesterday’s low of $1.3390 to move back towards $1.3500. The dollar is also down against the yen to 99.20 off a high of 99.80 set on Tuesday.

Strategists are now looking to other Fed leaders to see whether there is likely to be a policy change before the end of the year or early next year. The euro has moved up to 133.80 yen from yesterday’s low of 133.24 yen.

Mark Carney, Governor of the Bank of England took an opposite stance to Yellen saying he believes the UK economy has entered a phase of recovery. However, he added that the BoE was not planning to push up interest rates in the near future.

The pound is now trading up at $1.6048. The euro dropped from a high of 84.64 pence to 83.99 pence.