The dollar fell to a three-week low against the euro and a one-week trough versus the yen on Friday after Federal Reserve Chair Janet Yellen made no reference to US monetary policy in her speech at the annual central bank research conference in Jackson Hole, Wyoming. Investors were not expecting Yellen to make a policy statement anyway, but some market participants were hoping for some signal on the Fed's planned balance sheet reduction, if not on the outlook for US interest rate hikes.
"At this point, there isn't too much for Yellen to add," said currency strategist Sireen Haraji of Mizuho Corporate Bank in New York. "The FOMC (Federal Open Market Committee) has been very clear in terms of communicating their intention to continue tightening policy very gradually, and I don't think they see anything to change that view."
Instead, Yellen focused on US regulations, saying those put in place after the 2007-2009 crisis had strengthened the financial system without impeding economic growth, and any future changes should remain modest. The dollar fell to a one-week low of 109.23 yen after Yellen's speech. It was last down 0.2 percent at 109.33.
The euro, meanwhile, hit a three-week high against the dollar and was last up 0.6 percent at $1.1862. The dollar has been trading higher for most of this week after sharp losses in recent months. But Chandler said its upward move was about to end and that it should resume its downtrend. After Yellen, investors were looking to European Central Bank President Mario Draghi's speech later on Friday, but like the Fed chair, he may end up not delivering any monetary policy message.
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