Yellen's comments fired the dollar to a 5-week high

Nick Sanchez
September 28, 2017

The euro EUR=EBS slipped 0.5 percent to $1.1740 in early trades, its lowest level since August 23.

The Atlanta Federal Reserve Bank's new president, Raphael Bostic, said recent weak inflation probably means labor markets are still healing from the 2007 to 2009 financial crisis, and he would want "clear evidence" prices were firming before committing to another interest rate increase. While she and other policymakers still think inflation will eventually reach the Fed's 2 percent target, Yellen conceded the Fed may need to change its assumptions.

The Fed's preferred gauge of inflation has retreated from the central bank's 2 percent target for much of this year and now stands at 1.4 percent.

The dollar index was up 0.04% to 93.07 as of 04:22 BST. The retreat follows back-to-back session gains on the heels of tensions between the USA and North Korea.

The biggest focus for the market for Wednesday is the announcement of a tax plan by the United States administration and Republicans in Congress.

President Donald Trump and Republican leaders are proposing a cut in the top corporate tax rate to 20% from its current 35%, repealing the estate tax and eliminating state and local tax deduction as part of a sweeping overhaul of the USA tax code.

Each one presented valid arguments for their cases but Janet Yellen's speech before the 59th Annual Meeting of the National Association for Business Economics in Cleveland, Ohio proved why she's chair of the US Federal Reserve.

The Federal Reserve has kept its benchmark lending rate near record lows since the 2008 financial crisis to stimulate the US economy.

-Spanish Prime Minister Mariano Rajoy will meet U.S. President Donald Trump in Washington Tuesday while his team back in Madrid attempts to turn the screws on a secessionist push in Catalonia.

Platinum fell 0.2 percent at $920.20 per ounce, after hitting $912.50, its lowest since mid-July. In global markets, dollar found support for Fed Chairman Janet Yellen's explanation that interest rate hikes should be continued.

USA stocks traded mixed on Tuesday, as markets weighed a strong signal from Fed Chair Janet Yellen that interest rates will soon rise.

The U.S. Energy Information Administration will release stocks data later on Wednesday. The Dow Jones industrial average lost 11.77 points, nearly 0.1 percent, to 22,284.32.

The benchmark S&P 500 Index (NYSEARCA:SPY) pared gains to finish flat at 2,496.84.

-Germany's 10-year yield increased one basis point to 0.406 percent.

CURRENCIES: The dollar rose to 112.41 yen from 112.23 yen.

-West Texas Intermediate crude fell 0.5 percent to $51.94 a barrel. The euro was at $1.1756-1757, down from $1.1812-1813, and at ¥132.48-49, up from ¥132.01-02.

Other reports by AllAboutTopnews

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