The US dollar continues on its ascent against the basket of its global counterparts that make up the US Dollar Index (see above). This strength, combined with relative weakness in the Euro, brought about mainly by the imminence of Quantitative Easing in the Eurozone, is pushing the EURUSD pair back towards the near-record low of 1.11 that it hit on January 25th. last. The latest catalyst for dollar bullishness was the Durable Goods Orders report from the US Census Bureau which was published in our afternoon (GMT) yesterday.
There are many commentators who have been predicting a correction in the Greenback, but as of now there is little sign of this taking place.
Janet Yellen comes under fire at US Congress
Having caught her performance the day before, we missed the Chair of the Federal Reserve giving further testimony to Congress yesterday, so we must rely on the Wall Street Journal for an account of what took place (Grand Central: That Didn’t Go Well, Madame Chair).
According to the WSJ, Ms. Yellen was taken pretty severely to task by Republican representatives, who accused her of politicising her position. This is on the back of regular meetings with the Obama administration, and her propensity to speak out from time to time on the subject of inequality in the US. The Republican Party attitude is also, apparently, bound up with its claims that the Federal Reserve is not open enough about what it does, and the demands that it should undergo what they call an “audit” of its activities.
None of this affected the US currency, at least not adversely (see above). Could it do so in the future? Possibly. Minds should be cast back to the uncertainties that existed when a gridlocked US Senate found it impossible for a time to agree an annual budget. Then factor in the posturing that is starting in the run up to Presidential elections, which are due next year, and just about anything can happen.