The US dollar was generally upbeat while waiting for Fed Chair Janet Yellen’s testimony before the Senate later in the day. The issue of when and how fast the Fed will raise interest rates is absolutely central for the dollar – especially when the Federal Reserve is compared to other major central banks that are still easing. The semi-annual Humphrey – Hawkins testimony by the head of the Fed before Congress on monetary policy always attracts a lot of attention – particularly at turning points of the monetary policy cycle. Yellen is expected to provide clarification with respect to the Fed position, which some experts regarded as dovish following the publication of minutes from the late January policy-setting meeting. Dollar / yen was at 119.20 – near its 1-week high of 119.34.
The euro was again under some pressure as the market awaited the approval of the list of reforms that was submitted by Greece to its creditors in order for the 4-month loan extension to be granted. The consensus was that Greece delivered reforms that would be approved and that the process would move on, although some uncertainty remained whether some unexpected obstacle would appear. The euro traded in a narrow range between 1.1320 and 1.1340 during the Asian session.
The New Zealand dollar fell below the 75 cent mark against the greenback after a quarterly inflation expectations survey by the Reserve Bank of New Zealand showed a decline once again. The kiwi was trading at 0.7467 as the RBNZ could keep interest rates stable for longer or even possibly cut in the future.
Looking ahead, revised German GDP numbers will be followed by final Eurozone inflation for January. Mark Carney, who heads the Bank of England, will also speak before the UK Parliament Treasury committee, prior to Janet Yellen’s testimony before the Senate later. There will also be some key data releases out of the US, such as Case-Shiller house prices, Markit Services PMI for February and consumer confidence for the same month. To sum up, it will be a busy and interesting day for traders that should provide plenty of cues for price action.