NEW YORK: The US dollar slipped against the euro Thursday after Janet Yellen suggested the Federal Reserve could shift its tapering policy if recent weaker data represented a fundamental change in growth.
But the turmoil in Ukraine, with worries of a regional conflict involving Russia focused on Crimea, kept up demand for safe-haven currencies generally.
After trading lower ahead of Yellen's Senate testimony, at 2200 GMT the euro was up to $1.3710 from $1.3683 late Wednesday.
The dollar edged lower to 102.15 yen from 102.38 yen, while the euro moved to 140.05 yen from 140.11.
The dollar fell to 0.8882 Swiss franc from 0.8906 franc, while the British pound was slightly higher at $1.6688 compared with $1.6667.
Yellen told the Senate Banking Committee that Fed policymakers believe severe weather was behind some of the disappointing numbers of the past two months on job creation, industrial production and consumption.
However, the Fed chair allowed for a more bearish interpretation that conceivably could lead to a slower pace of cuts to the stimulus program, now at $65 billion monthly bond purchases.
"What we need to do and will be doing in the weeks ahead is to try to get a firmer handle on exactly how much of that set of soft data can be explained by weather and what portion, if any, is due to softer outlook," she said.
Analysts said Yellen's hint that the taper could be flexible, and her stronger statement that unemployment remains a big problem, suggests less of a determination to push ahead with policy tightening than was evident a few months ago.
"It is clear from today's hearing that market participants will have to wait until the March (Fed) rate decision on the 19th for true guidance on where the Fed stands," said Gregory Marks of DailyFX.
"Moving forward, sentiment may continue to shift between risk-on and risk-off as markets remain choppy amid good/bad data extremes and geopolitical tensions building in some emerging and frontier markets."
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