The dollar started trade on Monday pretty much where it closed in New York after the head of the U.S. central bank assured investors that the path back to ‘normal’ interest rates will only occur at a gradual pace. The dollar fetched 119.24 yen versus 119.11 late in New York on Friday. It has fallen more than 2 percent from a near eight-year peak of 122.04 set early this month.
The euro was also little changed at $1.0889, having in the last two weeks pulled up from a 12-year trough of $1.0457. In a highly anticipated speech late Friday, Fed Chair Janet Yellen outlined the case for a ‘gradualist approach’ to rate hikes, in comments mirroring those at the post-FOMC meeting on March 18.
She said policy tightening could “speed up, slow down, pause, or even reverse course” depending on actual and expected developments in the economy. “Yellen went to great length to detail why rate hikes would not be rushed and ultimately may not reach levels previously considered to be ‘normal’,” said Ray Attrill, global co-head of FX strategy at National Australia Bank.
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