USD Weakened On Yellen’s Dovish Speech
April 1, 2014 8:50 amVideo
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April 1, 2014 – Forex News
Hot Asset For Today: GBP/USD
EUR/USD
The euro gained in strength against the dollar in particular when Federal Reserve Chair Janet Yellen’s comments indicated to a very large extent a dovish approach towards moving forward on the U.S economy. Yellen reiterated the fact that the U.S. economy still needs monetary support to ensure a more sustained recovery. The Federal Reserve currently purchases $55 billion in bonds every month in order to boost the U.S economy. Such a policy of quantitative easing holds back interest rates in order to improve the economy, however in turn such a policy tends to a certain extent weaken the dollar. Yellen’s comments gave traders and investors an indication that tapering of the current quantitative easing program in the U.S may not come to an end in the fall of 2015 as was interpreted from her previous comments. The financial events to look out for today are the German Unemployment Change 7:55am GMT and U.S ISM Manufacturing PMI 2:00pm GMT. Today EUR/USD has support of 1.3700 and resistance of 1.3800.
GBP/USD
The pairing climbed up in favor of the dollar namely due on the back of comments made by Federal Reserve Chair Janet Yellen in particular when addressing the subject of quantitative easing. Yellen’s comments were interpreted by the markets as dovish. Bank of England Governor, Mark Carney emphasized the requirement for banks and regulators to continue safeguarding the U.K. financial system even as the outlook on global economic recovery is continuing to improve. On a side note, net consumer credit in the UK rose less-than-expected and also in the U.K. other data revealed that the net lending to individuals rose from the previous month. The financial events to look out for today are U.K Manufacturing PMI 8:30am GMT and U.S ISM Manufacturing PMI 2:00pm GMT.
USD/JPY
The dollar declined in favor of the yen. The reasoning was due to the head of the Federal Reserve commenting on the state of the U.S economy. Today in Japan a sales tax increase comes into effect. During the Asian trading session the pairing is very much trading in a sideways movement as dollar recovered some losses towards the end of yesterday’s U.S trading session. The impact of the implementation of the sales tax does have some concern for traders and investors. The bank of Japan warns that the impact of the higher sales tax will be painful and likely met with action, because of the fact concerns that the Japanese economic recovery could be altered. The financial events to look out for is U.S ISM Manufacturing PMI 2:00pm GMT.
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