Analysts at Westpac noted that Fed chair Yellen sounded more dovish than expected in her speech to economists in New York.
Key Quotes:
“She spent much time on global risks, and also on the asymmetry of conventional monetary policy when policy rates are very low as they are at present. Such a cautious stance suggests a rate hike in April is unlikely, and there are increased doubts that the Fed will be ready to move in June.
Our Westpac NY colleagues at the event agreed with the market’s instant reading of Yellen as leaning heavily to the dovish side. Markets cut pricing for an April move to zero and are not fully pricing one rate hike until Jan 2017.
The US dollar fell against major currencies in response to Yellen’s comments. EUR/USD rose from 1.12 to around 1.13 while USD/JPY fell from 113.40 to lows near 112.60 and GBP/USD gained about 1 cent to 1.4385.”
(Market News Provided by FXstreet)