Dollar slips as Yellen signals steady path on rate hike

The dollar dipped against other major currencies Wednesday as Federal Reserve Chair Janet Yellen hewed to a steady path on interest rates in a second day of testimony in Congress.

Yellen, appearing before a House of Representatives panel, provided no fresh clues on the timing of the rate increase, seen this year, but again signaled again that the central bank was in no hurry to raise rates.

"The recent pullback in the dollar indicates that investors had hoped for more from Yellen, but a June rate hike was never realistic," said Kathy Lien of BK Asset Management.

"The central bank doesn't want to raise interest rates too quickly because they fear that a premature increase would undermine the recovery and hamper job healing."

Lien said the Fed likely will signal a rate change in June and follow up in September with a rate increase. The federal funds rate has been pegged near zero for more than six years to keep credit flowing in support of the recovery.

"The dollar has softened just enough in February to be on course for its first down month in eight," said Joe Manimbo of Western Union Business Solutions.

"Weighing modestly on the buck has been mixed US data and signals from the Federal Reserve that higher interest rate policy may arrive later rather than sooner."

2200 GMT Wednesday Tuesday

EUR/USD 1.1360 1.1342

EUR/JPY 135.02 134.90

EUR/CHF 1.0778 1.0786

EUR/GBP 0.7319 0.7340

USD/JPY 118.86 118.94

USD/CHF 0.9487 0.9510

GBP/USD 1.5523 1.5453