The U.S. dollar weakened against competing major currencies on Thursday after Federal Reserve Chair Janet Yellen indicated in her testimony before the House Financial Services Committee that additional rate increases could be delayed.
“The bias remains toward further hikes, but their timing will be highly dependent on financial market developments,” Yellen wrote in a note.
USD/JPY dropped 1.46% to 111.70, the lowest in 15 months.
In her testimony on Wednesday, Yellen said that while the U.S. continues to face risks brought about by falling stock prices, volatile market conditions, and the slowing down in China, the U.S. economy is still on track for moderate growth, pointing out that economic indicators are not showing any sharp slowdown in growth.
“At this point, I see the U.S. economy as performing well,” Yellen told lawmakers.
The American currency fell by about 8% against the Japanese currency from a 6-week high of 121.68 on January 29, following the adoption of negative interest rates by the Japanese Central Bank.
EUR/USD gained 0.18% to trade at 1.1313, remaining within range of the 3 ½-month highs of 1.1354.
Elsewhere, the greenback remained stronger against the sterling, with GBP/USD slipping 0.49% at 1.4452, but was weaker against the Swiss franc, with USD/CHF inching down 0.36% to a 4-month trough of 0.9699.
Meanwhile, USD/CAD rose 0.28% to trade at 1.3965 as crude prices dropped to below $28 a barrel on Thursday, the lowest in 3 weeks.
The U.S. dollar index, which monitors the American currency’s strength against 6 trade-weighted major currencies, went down by 0.21% at 95.64, its lowest in 4 months.