👀 Ones to watch: The MOST undervalued shares to buy right nowSee Undervalued Shares

FOREX -Dollar gains before Yellen speech

Published 27/05/2016, 11:54 pm
© Reuters.  FOREX -Dollar gains before Yellen speech
EUR/USD
-
USD/JPY
-
DX
-
DXY
-

(Updates prices, adds comments; changes byline, dateline, pvs LONDON)

* Dollar stronger on rate hike speculation

* Fed Chair Yellen to speak on Friday

* Dollar gains even after GDP revision misses expectations

By Karen Brettell

NEW YORK, May 27 (Reuters) - The dollar index rose on Friday, on track for its strongest monthly performance since last November, before U.S. Federal Reserve Chair Janet Yellen is due to speak and as investors anticipate rate increases in coming months.

Investors are focused on Yellen's speech for any new signals that the U.S. central bank is close to raising interest rates, after numerous Fed officials in recent weeks have talked up expectations that an increase may be near.

The dollar added to gains on Friday after data showed that U.S. economic growth was revised upward for the first quarter, even though the revision was lower than economists had expected. headline was a little softer than expected, but not really anything that dents the outlook for what we've seen from Fed speakers, which seems to be a bit more hawkish since we've gotten the release of the April minutes last week," said Martin Schwerdtfeger, a foreign exchange strategist at TD Securities in Toronto.

Minutes from the Fed's April meeting, released last week, showed that central bank officials felt the U.S. economy could be ready for another interest rate increase in June. is due to speak at 1715 GMT at an event hosted by Harvard University.

The dollar index .DXY was up 0.30 percent at 95.454. It has surged from a low of 91.919 on May 3 but remains down slightly from Wednesday's two-month peak of 95.661.

As recently as early May, a Fed rate hike in June was completely off the agenda. But after a string of stronger data and the Fed officials' comments, the likelihood of an increase based on Fed funds futures has reached around 30 percent.

Investors will scrutinize next week's data releases, which will culminate in the June 3 employment report for May, for further signs of whether U.S. growth is strong enough for the Fed to pull the trigger on a rate increase.

"Next week is a big one with U.S. non-farm payrolls and ISM (Institute for Supply Management) data," said Nomura currency strategist Yujiro Goto.

Holidays in Britain and the United States are likely to curtail volumes on Monday.

The euro eased to $1.1150 EUR= , staying above Wednesday's two-month trough of $1.1129. The dollar was a tad weaker against the yen at 109.66 JPY= , still down from last Friday's three-week high of 110.59 yen.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.