You are here

US dollar extends losses after dovish Yellen comments

Thursday, March 31, 2016 - 06:42

dollarbills310316.jpg
The dollar fell for the second straight day Wednesday after the dovish comments by the Federal Reserve chief signaling US interest rates would stay low for some time.

[NEW YORK] The dollar fell for the second straight day Wednesday after the dovish comments by the Federal Reserve chief signaling US interest rates would stay low for some time.

Fed Chair Janet Yellen, citing risks in the global economy, said Tuesday the Fed should "proceed cautiously" in lifting rates, comments that analysts interpreted as taking a rate hike off the table at the April policy meeting and probably at the June meeting as well.

The Fed in December lifted rates for the first time in more than nine years as it seeks to wind down easy-money support following the 2008-2009 Great Recession.

"We believe that the US dollar has further room to fall because of the significance of Yellen's comments," said Kathy Lien of BK Asset Management.

sentifi.com

Market voices on:

The dollar dipped against the euro and the yen, but by about half Tuesday's losses. The greenback dropped 0.4 per cent at US$1.1337 per euro and 0.3 per cent at 112.41 yen.

Omer Esiner, chief market analyst at Commonwealth Foreign Exchange, said that dimming rate hike expectations have led to the dollar's worst quarterly performance in five years in the first quarter.

Traders were looking ahead to Friday's closely watched monthly US jobs data. Lifting expectations that the March job growth numbers will be solid was a report by payroll processor ADP showing companies added 200,000 jobs this month.

"This morning's strong ADP jobs report, which implies another solid nonfarm payrolls number on Friday, is having a limited impact on the dollar given the Fed's seeming willingness to look past positive data and instead focus on international risks," Mr Esiner said.

AFP

Nespresso
Pair your daily business read with the perfect cup of espresso.

Subscribe to The Business Times today to receive your very own Nespresso Inissia coffee machine worth $188.

Find out more at btsub.sg/btdeal

Powered by GET.comGetCom