During late Thursday trading, the US Dollar declined on news that US President Donald Trump’s national security advisor Michael Flynn resigned caused by the criticism he faced over talks of the U.S. lifting sanctions from Russia prior to Trump’s official start as president of the country.
Following a three-week high, the greenback slumped by around 0.2% on the announcement of Flynn’s resignation confirming market fears over the unstable or unpredictable Trump administration as early as this stage just less than a month onto Trump’s official presidency.
Yellen Hints Interest Rate Hike
The US Dollar recovered most of the losses it pared during Tuesday as US Federal Reserve Chair Janet Yellen stood in front of the Senate Banking Committee and commented that the market and the economy of the United states shouldn’t wait too long before the interest rate hikes.
The US dollar recovered from a 10-week decline from 11.59 last week against the yen as Yellen made her speech.
Although there is a lack of hint to when exactly the Federal reserve will raise interest rates again, the markets received Yellen’s statements as a possibility of more interest rate hikes in the US as a sign of health for the continuous recovery and rally of the greenback.
Meanwhile, Yellen’s positive remarks regarding the growth of the US Economy boosted optimism on the upcoming U.S. retail sales and inflation data to be published on Wednesday along with the inflation rate and automobile sales which rose by 0.4% last month.
Another speech from Fed Chair Yellen is set this Wednesday this time in front of the House Financial Services Committee. Markets are also set to shift their attention to this event to await more hints on the timeframe of the next interest rate hike.
USD Against Other Majors
Against the yen, the USD traded lower by 0.2% to 113.56 but has hovered over a 10-week low. Investors then turned to Fed Reserve Chair Janet Yellen’s congressional testimony along with the presentation of the central bank’s semiannual monetary report hoping for any hint as to where the federal reserve will raise interest rates again.
The euro meanwhile dropped by 0.1% to 1.0572 recording a one-month low in the middle of market uncertainty brought by weak economic data in the eurozone, Greek bailout, the presidential elections in France and ongoing political tension in different parts of the region.
The British pound traded lower against the US dollar by 0.59% at 1.2452 hitting a one-week low. As the Office for National Statistics released a report that UK’s unemployment rate is at a 11-year low declining by 4.8%