The dollar weakened against its peers today overlooking favorable US consumer confidence data as the market remained watchful leading up to a speech by Federal Reserve Chair Janet Yellen. The US consumer confidence index climbed from a reading of 94.0 in February to 96.2 in March while experts forecast a rise to 94.0. Yellen’s remarks revealed an extremely vigilant outlook for the US economy and the market was affected immediately by her less hawkish than expected speech. The US dollar index was down 0.73% trading at 95.29 off its 1.5 week high of 96.42 reached on Monday. In the wake of Yellen’s speech the index dropped by 0.6% as investors pushed back their rate hike timelines as the drop in the greenback supported practically all major asset classes.
The euro strengthened against the dollar with the pair up 0.70% trading at session highs of 1.1275 off its session low of 1.1168 reached earlier in the day. The euro had held its ground against the dollar leading up to the speech after which the euro moved higher amid increased selling interest in the greenback after Fed Chair Yellen stated that taking heed in raising interest rates was extremely justified. Recently a number of Fed speakers had hinted at being more aggressive in raising rates as the dollar rose alongside.
The pound strengthened against the dollar with the pair up 0.87% trading at 1.4379 off its session high of 1.4382 after having come off its session low of 1.4194 reached earlier in the day. The pound’s recovery was also boosted by Yellen’s remarks having continued its ascent from London’s morning session. The pair paused and retreated a bit when the somewhat downbeat FPC statement was released then the pair quickly rebounded and climbed even higher.
The yen strengthened against the dollar with the pair down 0.54% trading at 112.84 off its session low of 112.76 after having come off its session high of 113.80 reached earlier in the day. The yen had been pressured to the downside following remarks from Japanese Prime Minister Shinzo Abe which revealed his intention to only implement a sales tax increase if the economy was not first impacted by a surprising event. Most analysts predicted that Abe would push back plans to raise taxes as the move could jeopardize economic recovery in Japan. The yen was also pushed lower the following the release of varied economic data on household spending, unemployment and poor retail sales. Japanese household spending was up 1.2% ahead of forecasts for a decline of 1.5% year over year. Japan’s unemployment rate inched up from 3.2% to 3.3% while retail sales climbed 0.5% compounding forecasts for a rise of 1.7% year over year.
The Australian, New Zealand and Canadian dollars strengthened against the greenback even though oil benchmarks got slammed today. The Aussie dollar gained 1.02% against the greenback with the pair trading at 0.7622 off its session high of 0.7630 after having come off its session low of 0.7510 reached earlier in the day. The kiwi dollar surged 1.87% against the greenback with the pair trading at 0.6851 off its session high of 0.6859 after having come off its session low of 0.6715 reached earlier in the day. The Aussie and kiwi dollars had weakened earlier in the session due to worries over China and falling commodities namely iron ore. The loonie advanced 0.74% against the dollar with the pair trading at 1.3089 off its session low of 1.3072 after having come off its session high of 1.3216 reached earlier in the day. Statistics Canada released data which revealed that Canada’s raw materials price index dropped by 2.6% in February compounding forecasts for a decrease of 0.8% following a 0.4% decline in January.
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