In her comments on Tuesday, Federal Reserve Chair Janet Yellen discussed the need to continue with interest rate hikes despite uncertainty about the path of inflation, a sentiment which sent the dollar higher against its major trading partners. It would be “would be imprudent to keep monetary policy on hold until inflation is back to 2 percent,” she said.
As of 12:43 p.m. HK/SIN, the dollar index was up 0.09 percent to 93.09 .DXY. The dollar was higher against the yen, trading at 112.34. The greenback was also up against the euro and the British pound. The euro’s slide began on Monday after surprising election results in Germany, and continued into Wednesday morning with little relief in site. On Tuesday the common currency hit a five-week low of $1.17575 before heading slightly higher on Wednesday morning.
The biggest expected news event on Wednesday is the reveal of a tax plan by the Republicans in Congress. The plan is extremely important to U.S. President Donald Trump whose party failed, once again, to repeal Obamacare yesterday. Republicans lost the vote narrowly (52-48) after three Republican senators refused to support the repeal.
Oil prices remained stable on Wednesday, hovering near 26-month highs hit on Tuesday after U.S. data showed an unexpected drop in crude stocks as refineries boosted output after threats from Turkey to cut crude exports from Iraq. U.S. crude stocks were reduced by 761,000 barrels last week, the American Petroleum Institute announced on Tuesday. U.S. WTI futures were up 0.50 percent to $52.14 per barrel and Brent crude futures were up 0.34 percent to $58.64. The U.S. Energy Information Administration will release stocks data later on Wednesday.