Dollar recovers

Published: 15 Nov at 9 AM Tags: Euro, Dollar,

The dollar has recovered from earlier losses against a basket of major currencies. Janet Yellen, Federal Reserve Chair nominee, has hinted that the central bank will continue with its massive bond buying programme in an effort to stimulate the US economy. Even before Yellen answered questions in front of the Senate Banking Committee, the green back had begun to rally against the yen and the euro.

The Japanese currency could come under more pressure if the Bank of Japan goes ahead with currency intervention in order to keep the yen weak and the single currency has suffered because of weaker than expected data coming out of the eurozone.

Although analysts do not expect the dollar to tank, a continuation of the Fed’s easy money policy is likely to drive the currency lower. At her question and answer session Yellen said the central bank would push ahead with its current policy until there was solid proof that the US economy was on track for sustainable job creation.

The dollar has hit its highest level in two months against the yen at 100.14 yen. The euro lost 0.3 per cent to trade at $1.3451 after earlier hitting a five-day high of $1.3497.

Although UK retail sales data remains weak, a positive statement about the country’s economy by the Bank of England saw the pound rise 0.2 per cent to $1.6060.