The U.S. dollar rose yesterday on Yellen’s testimony as she kept alive the chance of a rate hike in March, although she also heightened uncertainty surrounding the U.S. economic policy under the new Trump administration.
"At our upcoming meetings, the central bank will evaluate whether employment and inflation are continuing to evolve in line with (the Fed's) expectations, in which case a further adjustment of the federal funds rate would likely be appropriate." the Fed chair said. In addition, Yellen did not say if Federal policymakers expected the U.S. economy would warrant three interest rate hikes during the year, as they last mentioned in December. The U.S. dollar index rose as much as 20 pips and settled at 101.20.
Gold was affected by the resignation of Trump's national security adviser Michael Flynn and Yellen’s testimony. The yellow metal rose to $1,228 at the beginning of yesterday’s trading session and could hit new highs during the day due to the U.S. political uncertainty.
Euro fell yesterday vs. USD and settled at $1.0575. Euro declined as a Eurozone Gross Domestic Product (GDP) for Q4 was up by 0.4% from 0.5%. Technically, the common currency could decline further to $1.05 during the week.
Oil failed to maintain the gains it had received after OPEC's efforts to comply with the production cut deal. U.S. crude settled at $53 and could hit new highs during the day.
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