The U.S. dollar strengthened against the other major counterparts in the Asian session on Friday,following comments from Federal Reserve Chief Janet Yellen that the Fed is likely to hike interest rates before the end of the year.
A week after the Fed voted to keep interest rates at zero, Yellen said in prepared remarks at the University of Massachusetts that the more “prudent strategy is to begin tightening in a timely fashion and at a gradual pace.”
“Most FOMC participants, including myself, currently anticipate… an initial increase in the federal funds rate later this year, followed by a gradual pace of tightening thereafter,”Yellen said.
Meanwhile, most Asian stock markets traded lower, dragged lower by the weak cues from Wall Street overnight and the comments from Yellen.
Thursday, the U.S. dollar showed mixed performance against its major rivals. While the U.S. dollar rose against the pound, it fell against the euro, the Swiss franc and the yen.
In the Asian trading, the U.S. dollar rose to a 2-day high of 1.1159 against the euro, from yesterday’s closing value of 1.1229. If the greenback extend its uptrend, it is likely to find resistance around the 1.10 area.
The greenback advanced to 1.5205 against the pound, 0.9792 against the Swiss franc and 120.38 against the yen, from yesterday’s closing quotes of 1.5242, 0.9742 and 120.06, respectively. The greenback may test resistance near 1.50 against the pound, 0.99 against the franc and 122.00 against the yen.
Against the Australian, the New Zealand and the Canadian dollars, the greenback edged up to 0.6978, 0.6295 and 1.3349 from yesterday’s closing quotes of 0.7019, 0.6351 and 1.3301, respectively. On the upside, 0.68 against the aussie, 0.61 against the kiwi and 1.34 against the loonie are seen as the next resistance levels for the greenback.
Looking ahead, Eurozone M3 money supply data for August is due to be released at 4:00 am ET.
At 4:30 am ET, the Bank of England is due to publish the Financial Policy Committee meeting statement in London.
In the New York session, U.S. GDP data for the second quarter and the University of Michigan’s final U.S. consumer sentiment index for September are due.
At 9:15 am ET, Federal Reserve Bank of St. Louis President James Bullard will participate in a discussion on ‘New Directions in Monetary Policy.’
At 12:30 pm ET, Deutsche Bundesbank President Jens Weidmann is expected to hold a press conference in Florence.
Subsequently, at 1:25 pm ET Federal Reserve Bank of Kansas City President Esther George is expected to speak on economic conditions and monetary policy before the Aksarben Business Luncheon in Omaha, Nebraska.
The material has been provided by InstaForex Company – www.instaforex.com