Dollar capped after Yellen, Canadian dollar stands tall on BOC rate hike
The dollar was capped against a basket of currencies early on Thursday after Federal Reserve Chair Janet Yellen did not sound as hawkish as many had anticipated, while the Canadian dollar stood near a 13-month high after its country`s central bank hiked interest rates for the first time since 2010.
The U.S. economy is healthy enough for the Fed to raise rates and begin winding down its massive bond portfolio, though low inflation may leave the central bank with diminished leeway, Yellen said at her semiannual appearance before Congress on Wednesday.
The dollar slipped as Yellen`s comments sparked a significant decline in U.S. Treasury yields.
The dollar index against a basket of major currencies was flat at 95.758 <.DXY> after retreating to as low as 95.511 the previous day, its weakest in 12 days.
The greenback was 0.2 percent higher at 113.440 yen
"We could see the dollar begin to adjust lower against the yen. It has already made two failed attempts to break above 114.500, where a large line of offers stands," said Junichi Ishikawa, senior forex strategist at IG Securities in Tokyo.
"Furthermore, as the confident-sounding Bank of Canada (BOC) demonstrated with it rate hike, the dollar`s strength is challenged, faced with a number of central banks poised for monetary policy shifts, which also include the Bank of England and the European Central Bank."
The BOC raised interest rates for the first time in roughly seven years on Wednesday, saying the economy no longer needed as much stimulus.
The Canadian dollar, also boosted by a rise in crude oil prices, stood at C$1.2750 per dollar
Other commodity linked currencies like the Australian dollar were also on the front foot. The Aussie, which has gained about 1 percent so far this week, stood near an eight-day high of $0.7685 touched overnight.
The euro was little changed at $1.1419
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Power of Compounding: How many years will it take to reach Rs 3 crore corpus if your monthly SIP is Rs 4,000, Rs 5,000, or Rs 6,000
IRCTC Dividend 2024: Railway PSU announces 200% interim dividend - Check record date and other details
Power of Compounding: Salary Rs 25,000 per month; is it possible to create over Rs 2.60 crore corpus; understand it through calculations
Reduce Home Loan EMI vs Reduce Tenure: Rs 75 lakh, 25-year loan; which option can save Rs 25 lakh and 64 months and how? Know here
New Year Pick by Anil Singhvi: This smallcap stock can offer up to 75% return in long term - Check targets
PSU Oil Stocks: Here's what brokerage suggests on these 2 largecap, 1 midcap scrips - Buy, Sell or Hold?
Power of Compounding: How many years it will take to reach Rs 2 crore corpus if your monthly SIP is Rs 3,000, Rs 4,000, or Rs 5,000
08:21 AM IST