USD awaits Yellen's testimony
According to the Federal Reserve's minutes of Jan. 27-28 meeting, many FOMC members think that the interest rates should stay near 0 for a longer time period because of low inflation and other risks. The central bank wants to see signs of continuing economic growth and recovery in inflation before raising rates. Policy minutes became a negative surprise for the dollar bulls.
Does it mean that we have to drop our June rate hike expectations? I’d better not judge hastily. The labor market is showing an upbeat dynamics over the past moths. What’s more, a stronger oil price recovery in the coming months would support the US inflation.
On the new week the US currency is expected to strengthen ahead of the Janet Yellen’s testimony on Tuesday, Feb. 24. She could pay attention to the positive economic developments that took place over the past weeks. Yellen is unlikely to discuss hate hike terms, but “hawks” would be grateful for any optimistic comments. You should also pay attention to the consumer price index on Thursday and to the preliminary Q4 GDP on Friday.