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The Aftermath of Yellen’s Congressional Testimony

By Sera Akinci  |  16/02/2017 09:21


After FED Chief Janet Yellen’s testimony on Tuesday and Wednesday, the US dollar index was up 1% at 91.87; 101.76 (DXY) a measure of the currency against six major rivals. This morning, the measure decreased to 100.92 in the Asia session.

The Consumer Price Index (CPI) increased by 2.5%, exceeding the expectations of 2.1%. The rise in energy prices, specifically in crude oil in previous months; were one of the main reasons, which contributed to boost the inflation rate.

On the other hand, JPY was the lowest performing currency against the dollar but has recovered from early session low figures. GBP also deteriorated against the dollar and GBPUSD traded at $1.2445, down 0.18%, at 5:40GMT. The EURUSD traded flat to higher at $1.0592, at a quiet Euro-zone economic calendar.

When we look at different approaches of central banks, we can firmly state that the European Central Bank as well as the Japanese Central Bank might adjust to monetary easing policies; whereas the US Central Bank is expected to gradually increase the interest rates. In addition, President Donald Trump’s desire to weaken the dollar could potentially benefit the global economy.
 

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