Dollar Flat Against Yen, Euro Ahead of Yellen Testimony

 
   By Hiroyuki Kachi 
 

        The dollar was flat against the yen and the euro in Asia trade Wednesday, with investors reluctant to take lopsided trading positions ahead of a busy day of market-moving events including Federal Reserve Chairwoman Janet Yellen's semiannual monetary-policy testimony.
        Around 0450 GMT, the greenback as at Y123.40, compared with Y123.39 late Tuesday in New York.
        The euro was at $1.1000 midday, compared with $1.1007 overnight. The bloc's common currency was also at Y135.76 from Y135.82.
        The WSJ Dollar Index, a measure of the dollar against a basket of major currencies, was up 0.01% at 87.59.
        Investors avoided aggressively taking positions manner hours before Ms. Yellen heads to Capitol Hill to present the Fed's semiannual Monetary Policy Report and take questions from lawmakers.
        The dollar also maintained stability after China's slightly-better-than-expected economic growth and the Bank of Japan's decision to stand pat at its monetary policy meeting. But currency market investors shrugged off these events, as well as comments by a Fed member that a rate increase is imminent. Instead, they sat on the sidelines before her appearance before the House Financial Services Committee later on Wednesday.
        Federal Reserve Bank of Kansas City President Esther George said Tuesday "it's time" for the U.S. central bank to raise short-term interest rates to reflect solid improvements in the economy.
        "It's hard to make a move in one direction," until Ms. Yellen's testimony said Ayako Sera, head of market research at Sumitomo Mitsui Trust Bank.
        But Ms. Sera said "it's impossible to assume a big change (in the Fed's stance) from her speech on Friday," when Ms. Yellen reaffirmed the central bank's plan to start raising short-term U.S. interest rates later this year.
        So investors are watching "if it's going to happen in September or December. And the rest is the pace (of the rate increases) after that," she said. She said such a future pace of rate increases may become clear if Ms. Yellen drops hints as to where the U.S. economy is positioned currently in the cycle: at the lower end or close to its peak.
        Following news of China's growth, the Australian dollar rose to as high as $0.7490 and Y92.44, respectively from $0.7451 and Y91.93.
        China's growth remained at 7% in the second quarter, a level economists had thought would be hard to reach, amid broad signs that Beijing's policies to jump-start the world's second-largest economy haven't yet taken hold.
        The Shanghai Composite Index was last trading 2.4% lower, meanwhile, the benchmark Nikkei Stock Average was 0.3% higher midday.
        Among other currency pairs, the British pound rose to highs of $1.5655 and Y193.25, respectively from $1.5636 and Y192.91. The pound managed to extend overnight gains that followed comments by Bank of England Gov. Mark Carney that the time for an interest-rate increases in the U.K. is drawing nearer.
        Write to Hiroyuki Kachi at Hiroyuki.Kachi@wsj.com
        (END) Dow Jones Newswires

        July 15, 2015 01:23 ET (05:23 GMT)

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