The dollar remained weaker following a two-day drop against major peers as Federal Reserve Chair Janet Yellen reiterated Wednesday that the central bank’s timetable for raising interest rates is flexible.
A gauge of currency volatility tumbled for a third session following Yellen’s testimony to a House committee, a day after she told a Senate panel that the labor market was improving even as inflation and wage growth remain too low. Australia’s dollar slumped after a report showed business spending declined more than analysts forecast.
“Yellen’s second day of testimony wasn’t as hawkish as everyone hoped, so while there’s still a chance of a June rate hike, people are now thinking the timing may be a little later,” said Kazuo Shirai, a Los Angeles-based trader at MUFG Union Bank NA. “The dollar continues to see some selling on the back of that.”