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Dollar gains despite Yellen's dovish stance

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(Globalpost/GlobalPost)

The dollar pushed higher against the yen and euro Thursday despite US Federal Reserve chair nominee Janet Yellen's solidly dovish testimony in Congress.

Overriding Yellen's promise of more Ben Bernanke-like stimulus if she is confirmed as his successor were weak growth data in Japan and the eurozone.

At 2200 GMT the euro was at $1.3459, compared to $1.3492 late Wednesday.

The dollar rose to 100.00 yen from 99.14, while the euro gained to 134.61 yen from 133.73.

Yellen held out the promise of continuing quantitative easing as long as US growth remains tepid and unemployment elevated, holding to the Fed policy line.

She gave no hint of the timing of a taper of the $85 billion a month asset-purchase program, saying -- like Bernanke -- that everything is data-driven and that the data still requires Fed support for the economy.

"I consider it imperative to do what we can to promote a very strong recovery," she told the Senate Banking Committee.

As dovish as that was, the dollar gained and US bond yields fell, as the poor growth data from abroad encouraged shifting to the greenback.

Japan announced that growth halved in the July-September quarter as exports weakened and consumer spending slowed.

Official data showed the Japanese economy expanded at an annualized rate of 1.9 percent, a marked slowdown from the 3.8 percent rise in the previous three months.

Meanwhile the Eurostat statistics agency said that the already-weak eurozone recovery slowed in the third quarter, with powerhouse Germany off its stride and France hit by a surprise contraction.

The 17-nation eurozone economy grew just 0.1 percent in the three months through September after a gain of 0.3 percent in the previous quarter.

The British pound scored a bare gain on the dollar at $1.6065 from $1.6062 late Wednesday. The dollar rose to 0.9160 Swiss franc from 0.9126 franc.

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http://www.globalpost.com/dispatch/news/afp/131114/dollar-gains-despite-yellens-dovish-stance