It seems like the U.S. dollar has found its second wind, as the ICE (IntercontinentalExchange) USD index rose to its highest level in 13 years on Wednesday. The surge came in the wake of Federal Reserve Chairwoman Janet Yellen's speech to the Economic Club of Washington, where she appeared to put the U.S. central bank on track to raise interest rates in two weeks, according to Market Watch.
Yellen said that the Fed's rate-setting committee is set to review all pertinent economic data before deciding whether to raise the Fed fund's rate target at its next scheduled meeting, which is set for Dec. 16. She also stated her optimistic views on inflation and growth.
Even before Yellen's speech, however, the U.S. dollar had already gone higher, exceeding both the yen and the Euro in rangebound Asia trade on Wednesday. At 11:50 a.m. EST, the dollar was already at Y123.05 as compared with its rate of Y122.87 late Tuesday, reports NASDAQ.
The U.S. dollar has also performed well against the Euro, which declined to $1.0618 from $1.0632 late Tuesday.
Though U.S. manufacturing contracted in November for the first time since 2012, the U.S. dollar's losses have been quite limited, as investors have opted to remain on the sidelines ahead of impending possibly market-moving events such as a European Central Bank policy meeting that is set for Thursday and the release of U.S. labor data on Friday.
For now, however, the U.S. dollar is hovering around a level investors consider "comfortable."
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