Valeria Bednarik, chief analyst at FXStreet explained that the American dollar plummeted after the Federal Reserve Chair Janet Yellen said that U.S. central bankers should be cautious in raising interest rates.
Key Quotes:
“In spite core inflation seems to be rising, is yet to see if the latest recovery “will prove durable.”
“She also added that the FED has “considerable scope for stimulus if needed.”
“A dovish tone from Yellen should not have came as a surprise, but it was, given the hawkish tone of FED’s officers during the past week.”
“The greenback was trading mixed ahead of the event, finding some limited support in weaker commodities’ prices and better-than-expected US data, as the Conference Board Consumer Confidence Index improved in March, up to 96.2 up from 94.0 in February.
But Yellen sealed dollar’s destiny, and sent the EUR/USD pair up to the 1.1300 region, trespassing last week’s high, and therefore indicating a strong upward potential for the upcoming sessions. A rate hike in the US is now is unlikely until at least September, and the dollar will pay the price, probably by sinking further across the board.”
(Market News Provided by FXstreet)