SINGAPORE: The dollar edged higher against the yen on Tuesday, but traders were wary of making too many bets on the currency ahead of congressional testimony by Federal Reserve Chair Janet Yellen.
Yellen’s appearance before the U.S. Senate Banking Committee is drawing extra attention after dovish-sounding minutes from the Fed’s January meeting released last week dented expectations for an early interest rate hike, and hurt the dollar.
Markets will be listening closely for whether Yellen takes a dovish tone in her testimony.
“The more convoluted and muddled her message is on when rates will rise, the more negative it will be for the U.S. dollar. But even in this case, we do not expect the dollar to crash because rates are still poised to move higher,” Kathy Lien, managing director at BK Asset Management, said in a note to clients.
The greenback was broadly firmer ahead of Yellen’s testimony, but remained within its recent trading ranges.
