Yellen keeps options open on rate hikes

Yellen keeps options open on rate hikes

The reduction in the balance sheet, which will begin slowly as the Fed reinvests only a portion of the holdings that mature each month, will mark the final exit from crisis-related policies.

[W] e would push back again any "dovish" interpretation of the testimony associated with the fact that Yellen said, "Because the neutral rate is now quite low by historical standards, the federal funds rate would not have to rise all that much further to get to a neutral policy". One Republican cautioned that she didn't deserve all the credit, noting the economy's improvement and the stock market's gain since the election in November.

USD/JPY is dropping towards 113. Hong Kong's Hang Seng added 1.5 percent to 25,877.64.

In Europe, futures for the Eurostoxx 50 and the DAX were both up 0.3 percent, while the FTSE was 0.2 percent higher.

But by the closing bell, Wall Street shares had clawed back their losses.

In an interview for a Scottish newspaper, the Press and Journal, published on Wednesday, Bank of England Deputy Governor Ben Broadbent said that while there was reason to see the bank moving towards higher rates, there were "a lot of imponderables".

The yen was also pressured after Japan's core machinery orders unexpectedly tumbled in May on persistent weakness in the services sector.

Yellen did not tip her hand on when the next rate hike would come.

The Malaysian ringgit was up 0.06 percent, little moved by domestic industrial production for May, which rose 4.6 percent from a year earlier. This was the lowest since 1975.

"But we are at the lower end of the range for gold prices".

"This is supporting the dollar as a positive factor, and limiting its downside at the moment", he said.

The kiwi weakened yesterday after figures showed retail spending on credit and debit cards was unchanged in seasonally adjusted terms in June from May when it fell 0.4 per cent, with lower fuel prices offsetting the expected gains in spending from the Lions rugby tour. Next key support for the greenback may be found around the 0.78 mark.

At the time of writing the Euro to US Dollar (EUR USD) exchange rate is trading at 1.1454. This may be compared to a high of 1.2939 hit at 7:30 am ET.

America's top central banker sees President Trump's agenda as a source of uncertainty for the USA economy.

But she said it was unclear when inflation would start to pick up in response to the strengthening economy.

Kansas City Fed President Esther George is set to speak in Denver at 2:15 pm ET.