💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

FOREX-Dollar edges lower ahead of Yellen, pressured by Flynn resignation

Published 14/02/2017, 04:13 pm
© Reuters.  FOREX-Dollar edges lower ahead of Yellen, pressured by Flynn resignation
EUR/USD
-
USD/JPY
-
JP225
-
DX
-
CME
-
6502
-
DXY
-

* Trump national security aide Flynn resigns over Russian contacts

* Yellen to testify to Congress on Tuesday, Wednesday

* Dollar edges down vs yen but well above last week's lows

* French election concerns continue to plague euro

TOKYO, Feb 14 (Reuters) - The dollar extended losses on Tuesday after President Donald Trump's national security adviser Michael Flynn quit, with investors waiting to see whether Federal Reserve Chair Janet Yellen offers clues to the likely pace interest rate increases in her congressional testimony.

The dollar weakened 0.3 percent on the day to stand at 113.43 yen JPY= , off Monday's high of 114.17 but well above a 10-week low of 111.59 yen touched a week ago.

It touched its session low of 113.39 yen shortly after news that Flynn resigned late on Monday under scrutiny over whether he discussed the possibility of lifting U.S. sanctions on Russia before Trump took office. news weighed on the dollar against the yen because it's a hard situation to understand, and also to understand what kind of broader fallout it will have," said Kumiko Ishikawa, FX market analyst at Sony Financial Holdings.

Slumping Japanese equities also put upward pressure on the yen. The Nikkei stock average .N225 was down 0.7 percent, extending losses in afternoon trading after Toshiba Corp 6502.T unexpectedly delayed the release of its quarterly earnings and details of a multi-billion dollar writedown to its nuclear business. dollar index was down 0.1 percent on the day at 100.84 .DXY , edging away from Monday's high of 101.11, its highest level since Jan. 20.

Yellen will present the U.S. central bank's semi-annual report on monetary policy and the economy in testimony to the Senate Banking Committee on Tuesday, followed by a the semi-annual monetary testimony before the House Financial Committee on Wednesday.

"People are just waiting for Yellen's testimony, and depending on what she says, the dollar could test the upside again," said Kaneo Ogino, director at foreign exchange research firm Global-info Co in Tokyo.

"But a few Japanese exporters are selling dollars at the moment, disappointed that it didn't go even higher after the weekend meeting" of U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe, who apparently did not discuss currency policy or trade protectionism, Ogino said.

Abe said on Tuesday he agreed with Trump that currency issues should be left for the finance leaders of each country to discuss. Federal Reserve Bank President Robert Kaplan, a voter this year on the Fed's policy-setting panel, said on Monday in remarks prepared for posting to the Dallas Fed website that the U.S. central bank should act soon to raise rates or risk having to abandon its plan to do so slowly. does not need to say anything in detail. I think she'll be very cautious, so currencies might not move so much," said Masashi Murata, senior strategist at Brown Brothers Harriman.

"She might suggest some possibility of the Fed hiking rates in March, but I think that risk is very small," he added.

Interest rates futures showed investors pricing in only about a 1 in 5 chance the Fed will increase rates at its meeting next month, according to CME Group's (NASDAQ:CME) FedWatch program.

The dollar also got a lift from Trump's promise last week of a "phenomenal" tax plan that the White House said would include tax cuts for businesses and individuals. The hopes raised by his comments helped lift U.S. stocks to record highs on Monday.

The euro, which has come under pressure in recent sessions as France's election campaign has heated up, was up 0.1 percent at $1.0611 EUR= .

French presidential frontrunner Emmanuel Macron is being targeted by Russian media and internet attacks from within Russia with the goal of helping the election campaigns of his pro-Moscow rivals, his party chief said on Monday.

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.