US Dollar (USD) Exchange Rate: Dollar Climbs to a Weekly High on Yellen Comments
The US Dollar climbed to its highest level in over a week on Wednesday as speculation grew that Federal Reserve Chairman Janet Yellen will reiterate the Central Bank’s committed to continue to taper its quantitative easing programme.
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Yellen is due to address a Senate Panel tomorrow and is expected to say that the Central Bank will continue to taper its monetary easing programme despite a recent run of disappointing economic data results. Economists have blamed the harsh winter weather which has severely impact large swathes of the USA over the last few months.
“Any data or any Fed speakers going forward that reiterate the Fed’s tapering is Dollar-positive. Investors are really concerned about how weak economic data may influence the outlook for monetary policies,” said the chief market analyst at Commonwealth Foreign Exchange Inc.
Earlier this month Janet Yellen said that the US economy has strengthened enough to withstand cuts to the Federal Reserve’s monetary stimulus programme. She added that only a notable change in the country’s economic outlook would slow the rate of tapering.
The US Dollar also found support after a report showed new home sales in the country increased by 9.6%. The figure was the sharpest increase since 2008 and showed that the US housing sector remained strong despite the unusually harsh weather. The Northeast led the advance last month with a 73.7% surge, the biggest jump since July 2012. Sales climbed 11% in the West and 10.4 percent in the South. They dropped 17.2% in the Midwest.