Janet Yellen
U.S. Federal Reserve Board Chair Janet Yellen testifies at the House Financial Services Committee in Washington February 10, 2016. Reuters/Gary Cameron

Bell FX Currency Outlook: The Australian Dollar, since local close last night traded in a 56 point range. Fed Chair Yellen acknowledging global financial risks while maintaining her gradual hiking message.

Australia: A more optimistic night for global risk, allowing AUD and NZD to make some slight gains. EUR was volatile, while JPY dipped to a new cycle low, below USD114.00. We don’t have anything major on the
calendar either locally or internationally today (save for Fed chair Yellen’s second Congressional testimony, this time in the Senate). Only secondary data are released today, with Australian consumer inflation expectations data at 11:00am AEDT. Hong Kong re-opens after its three-day Lunar New Year holiday. The performance of the Hang Seng Index may rate a mention, as too the performance of USD/CNH.

Majors: Yellen’s message was very similar to Dudley message last week. Yellen admitted that financial conditions in the U.S had tightened, but she was by no means overly dovish. Yellen did acknowledge tighter US financial conditions/global headwinds to watch out for. Yellen fielded questions about negative rates and reversing course, but generally stuck to the message “The FOMC anticipates that economic conditions will
evolve in a manner that will warrant only gradual increases in the Fed fund rate.” Yellen made it clear that while the Fed still expects to continue on its gradual tightening path, policy was not on a pre-set course and would respond appropriately to developments.

Economic Calendar 11 FEB

  • US Fed’s Yellen to appear before Senate Banking Committee
  • US Initial Jobless Claims
  • AU Consumer Inflation Expectation
  • US Bloomberg Consumer Comfort

Bell Fx

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