Published: Mon, July 17, 2017
Sport | By Ellis Neal

US Dollar Falls On Dovish Yellen Testimony

US Dollar Falls On Dovish Yellen Testimony

Traditionalists at the Fed, including Yellen, believe that if policy makers do not tighten pre-emptively in this environment, unemployment will undershoot its natural rate, pushing inflation above target. But while Yellen was mostly positive, "her forward-looking comments on the economy and rates seemed a bit less emphatic than those from her press briefing last month", noted Jim O'Sullivan, chief US economist at High Frequency Economics. Central banks around the world have been hinting that the accommodative policies in place for years may no longer be needed amid signs that the global economy is gaining traction.

The star performer was the Canadian dollar, which rocketed to 11-month highs after the country's central bank hiked rates for the first time in seven years and left the door wide open to further moves.

-Yellen will continue testifying Thursday.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.2 percent to its highest since May 2015.

The S&P 500 Index, along with related funds including the SPDR S&P 500 ETF (NYSEARCA:SPY), iShares Core S&P 500 ETF (NYSEARCA:IVV) and Vanguard 500 Index (NYSEARCA:VOO), were 0.7% higher Wednesday.

Delta Air Lines is due to report results Thursday. The FTSE 100 rose 1.2 percent.

The benchmark closed at a three-week low in the previous session, falling almost 1 percent to 5,673.8 - the second time this month it dropped below the psychologically important 5,700 level.

-The Bloomberg Dollar Spot index fell 0.4 percent.

The greenback that closed Wednesday's trading at 1.1411 against the euro and 0.9653 against the franc fell to 1.1456 and 0.9615, respectively.

-The loonie rose 1.4 percent to $1.27356.

Elsewhere in markets, the benchmark 10-year yield is lower by 5 basis points at 2.31%.

The Dow Jones Industrial Average rose 123.07 points, or 0.57 percent, to close at 21,532.14, a record high.

Energy companies advanced, tracking a rise in oil prices, which settled up 1% at $45.49 a barrel (http://www.marketwatch.com/story/oil-extends-gains-after-upbeat-us-production-data-2017-07-12).

Labor force participation in the USA has plummeted since the start of the 21st century, and male involvement in the workforce has been falling off ever since the 1950s.

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