Currency volatility is poised for its biggest weekly drop since 2010 after Federal Reserve Chair Janet Yellen reiterated Wednesday that the central bank’s timetable for raising interest rates is flexible.
A gauge of the dollar remained weaker 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. A measure of expected currency swings has fallen every day this week as euro-region finance ministers agreed to a package of economic measures for Greece on Tuesday. Australia’s dollar slumped after a report showed business spending declined more than analysts forecast.
“Yellen did a good job of containing markets from racing ahead” with bets for higher rates and a stronger dollar, said Satoru Igarashi, a senior foreign-exchange strategist at Mizuho Securities Co. in Tokyo. “Volatility is falling considerably.”
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