Dollar Jumps Back to Two-Month Highs on Yellen’s Comments

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The dollar started the week strong, rising back to two-month highs on Monday after remarks by Federal Reserve Chair Janet Yellen hinting the likelihood of imminent rate hikes boosted demand for the American currency.

Trade volumes, however, remained light on Monday due to holidays in the United States and in the United Kingdom.

USD/JPY went up 0.66% to a 30-day high of 111.10.

The dollar gained broadly after Janet Yellen, Federal Reserve chairperson said Friday that a “gradual and cautious” hike in interest rates would be appropriate if the economy and the labor market continued to pick up as expected.

The greenback was also boosted after the Commerce Department revealed on Friday that gross domestic product (GDP) grew at an annualized rate of 0.8% during the first three months of the year, higher from the previous estimate of 0.5%.

Meanwhile, EUR/USD edged higher, adding 0.16% to trade at 1.1132, bouncing back from the two-and-a-half month lows of 1.1097.

The U.S. dollar was stronger against the pound, with GBP/USD shedding 0.29% at 1.4596 but weaker against the Swiss franc, with USD/CHF giving up 0.21% to trade lower at 0.9926.

The Australian and New Zealand dollars were lower against their American rival, with AUD/USD edging lower 0.08% at 0.7174 and with NZD/USD falling 0.15% to 0.6693.

Up north, USD/CAD tacked on 0.34% to trade higher at 1.3064.

Commodity-weighted currencies slumped after oil prices fell on Monday due to expectations of increased global output after several middle eastern countries raised exports ahead of the OPEC meeting.

The U.S. dollar index was steady at 95.75, a high last seen March 29.

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