Yellen Says Fed Needs Gradual Rate Hike Despite Soft Prices. The U.S. dollar was underpinned by remarks from Fed Chairperson Yellen on the need to continue with rate hikes, she also clarified that it wouldn’t make sense to keep monetary policy unchanged until inflation reaches the actual 2% target, adding that the FOMC should be careful about moving too slowly. The dollar’s index stood at 93.07 in early Wednesday after it reached a high of 93.286 the previous day, its highest in almost a month.
Euro Hampered by Political Worries in Europe. The euro still struggles weighed down by political uncertainty following the German election at weekend. The euro weakened against other currencies on Tuesday, hitting a five-week low of $1.1756 US Dollars, a 10-week low of 0.87545 British pound and two-week low of 1.14075 Swiss franc.
Morneau Says Canada Can Do Well with Higher Dollar. Even with the dip in crude oil, the positively-correlated Loonie managed to hold its ground and pocket a few pips during Canadian FM Bill Morneau’s speech. Morneau assured that the economy could continue to do well even with the Loonie’s current exchange rate levels and higher interest rates. Morneau explained that the currency’s strength is a reflection of the economy’s strong performance and even with the BOC’s recent hikes, interest rates remain at historically low levels.
Risk Appetite Still Shaky. North Korea and the Donald seem to have paused from hurling harsh words at each other for the time being, allowing U.S. equity indices to score a few gains from the tech sector bounce.
Gold Prices Steady After Hawkish Yellen Comments. Gold prices were steady early Wednesday after falling over 1.3 percent in the previous session on hawkish comments from U.S. Federal Reserve Chair Janet Yellen. Spot gold rose to $1,296.00 per ounce.
Oil Prices Fall from 26-Month High. Oil prices have ended in red after investors took profits following a rally to 26-month highs spurred largely by threats from Turkey to cut crude exports from Iraq’s Kurdistan region. On Tuesday, the market was also under pressure ahead of weekly US oil inventory data that was expected to show a fourth straight week of crude builds.