The US dollar is gaining strength across the board, with EUR/USD hitting 1.0960, GBP/USD losing 1.56 and USD/JPY advancing to 123.80.
The background is positive comments from Yellen on the US economy also repeating that rates are set to rise this year, removing fears coming from yesterday’s weak retail sales. In addition, today’s data already looks better.
Yellen’s prepared statement
Needless to say, Yellen repeated the stance that any such decision is data dependent: “if the economy evolves as we expectâ€. She did point to weak growth abroad and the strong dollar. Both impact US exports.
The Fed Chair did not say anything really new (if we look at the recent rate statement), but the contrast with the disappointment seen yesterday as well as fresh appetite for dollars certainly helps.
Greek news continue dominating the news and they also reached Yellen’s testimony. She mentioned that large banks have low direct exposure to the debt stricken country.
Data
The US producer price index came out with a rise of 0.4%, double the 0.2% rise that was predicted. Also Core PPI beat expectations with a rise of 0.3% against 0.1%. This is data for June.
The Empire State Manufacturing Index for July came out at 3.9 points, better than 3.4 that was estimated and -2 points last month.
US industrial output is also a beat: +0.3% instead of 0.2% predicted. The capacity utilization rate is up to 78.4%, better than 78.1% that was on the cards.
