Yellen: Proceeding cautiously with tightening monetary policy - BNZ

Jason Wong, Currency Strategist at BNZ, notes that the Fed Chair Yellen testified on monetary policy to the Senate Banking Panel.

Key Quotes

“Coming so soon after her press conference last week, there wasn’t an expectation of much new and the lack of market reaction suggested that was the case. The message remained one of proceeding cautiously with tightening monetary policy, with no timeline given. Both the WSJ and Bloomberg write-ups suggested a subtle change in tone, such as adding qualifiers to her optimism on the economic outlook.

That subtle shift in tone didn’t prevent a modest recovery in the USD, with various USD baskets up in the order of 0.3%. At the same time, ECB Chief Draghi was speaking at the European Parliament, and his noting of subdued inflation dynamics and willingness to provide more stimulus added a downside bias to the EUR.”