The dollar was mostly steady in Asia on Wednesday in a light regional data day with another day of testimony to Congress by the Fed chief expected to be closely-watched to see if she tweaks tone on interest rate comments made on Tuesday.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.02% to 101.18. USD/JPY changed hands at 114.28, up 0.02%, while AUD/USD traded at 0.7675, up 0.18%.
Overnight, the U.S. dollar rose against a basket of the other major currencies on Tuesday after Federal Reserve Chair Janet Yellen said in congressional testimony that the U.S. central bank would consider raising interest rates at its upcoming meetings.
Yellen said a rate increase would be appropriate at one of the Fed’s forthcoming meetings if the economy evolves in line with expectations, adding that waiting too long to remove monetary policy accommodation would be unwise. She also said changes to fiscal policy under the Trump administration could affect the economic outlook, but it was too early to know how this would unfold.
According to Investing.com's Fed Rate Monitor Tool less than 20% of traders expect the Fed to raise interest rates at its next meeting in March. The chance of a June increase is seen at just below 50%. The Fed has indicated that it could hike rates three times this year.
Separately, data on Tuesday showed that U.S. producer prices rose at the fastest rate in four years in January as energy costs surged, but the stronger dollar meant that underlying inflation remained tame.
The producer price index rose 0.6% in January, the Labor Department said.
The dollar had come under pressure earlier after President Donald Trump's national security adviser Michael Flynn resigned late Monday amid allegations that he discussed the possibility of lifting sanctions with Russian officials before Trump’s inauguration.