Dollar slips lower on Trump Jr emails, Yellen in focus
Investing.com -The dollar slid lower on Wednesday amid fresh concerns over the Trump administration's alleged connection with Russia, while investors looked ahead to Federal Reserve Chair Janet Yellen's comments.
USD/JPY was down 0.41% to 113.45 by 03.26 AM ET, well below the four-month high of 114.49 set on Tuesday.
The dollar came under pressure after emails released by Donald Trump Jr revealed that he welcomed assistance from a Russian lawyer during his father's 2016 election campaign against Hillary Clinton.
The euro was steady against the dollar, with EUR/USD at 1.1457 after rising to a 14-month peak of 1.1489 overnight.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was little changed at 95.49, not far from the nine-month low of 95.22 plumbed in late June.
Investors were looking ahead to comments from Federal Reserve Chair Janet Yellen, who was due to make semi-annual testimony on monetary policy before the U.S. Congress on Wednesday and Thursday.
Her comments will be monitored closely for any new insight on the timing of the next U.S. rate hike and clues on how the central bank plans to pare back its massive balance sheet.
Investors remained cautious after two Fed officials on Tuesday cited sluggish wage growth and subdued inflation as reason to stick to a cautious approach on raising interest rates.
Fed Governor Lael Brainard suggested her support for any future rate increases will depend in part on how inflation shapes up.
At a separate event, Minneapolis Fed President Neel Kashkari said he finds it hard to believe that the U.S. economy is in danger of overheating when wage growth is so low.
The Canadian dollar was a touch higher against its U.S. counterpart, with USD/CAD edging down to 1.2906 as investors awaited the outcome of the Bank of Canada meeting later Wednesday.
Many analysts think the BoC will hike interest rates for the first time in seven year after recent hawkish remarks from senior bank officials.
Meanwhile, sterling fell to two-week lows, with GBP/USD down 0.23% to 1.2817 after Bank of England Deputy Governor Ben Broadbent said in an interview published on Wednesday that he is not ready to raise interest rates just yet.
The remarks indicated that the BoE is now almost certain to keep rates on hold at their current record lows at next month’s meeting.
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