24 Feb 2015
EUR/USD wavers on Yellen testimony
FXStreet (Córdoba) - EUR/USD oscillated sharply, reacting negatively first only to bounce back, following the introductory statement of Fed Chair Janet Yellen before the US Congress.
At the semi-annual testimony, Yellen discussed the Fed language and the “patient” reference. She said that being patient means that the FOMC considers it unlikely that economic conditions will warrant a rate hike for at least the next couple of meetings, however dropping the word will not mean that a rate hike will automatically follow in two meetings.
Yellen once again said that the appropriate timing for a hike will be data dependant. “Provided that labor market conditions continue to improve and further improvement is expected, the Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when, on the basis of incoming data, the Committee is reasonably confident that inflation will move back over the medium term toward our 2 percent objective”, she said.
EUR/USD initially moved lower and hit a fresh daily low of 1.1288 as the dollar spiked, but quickly turned higher and reached a fresh peak of 1.1349. However, the Yellen-inspired moves proved to be short-lives as EUR/USD is currently trading at the 1.1330 zone, little changed on the day, and roughly at the same level it was before the testimony.
At the semi-annual testimony, Yellen discussed the Fed language and the “patient” reference. She said that being patient means that the FOMC considers it unlikely that economic conditions will warrant a rate hike for at least the next couple of meetings, however dropping the word will not mean that a rate hike will automatically follow in two meetings.
Yellen once again said that the appropriate timing for a hike will be data dependant. “Provided that labor market conditions continue to improve and further improvement is expected, the Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when, on the basis of incoming data, the Committee is reasonably confident that inflation will move back over the medium term toward our 2 percent objective”, she said.
EUR/USD initially moved lower and hit a fresh daily low of 1.1288 as the dollar spiked, but quickly turned higher and reached a fresh peak of 1.1349. However, the Yellen-inspired moves proved to be short-lives as EUR/USD is currently trading at the 1.1330 zone, little changed on the day, and roughly at the same level it was before the testimony.