Dollar Tumbles on Fed Chief’s Remarks

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The dollar fell against major currencies on Tuesday, after market players were disappointed when Federal Reserve Chair Janet Yellen avoided commenting on the timing of future rate increases.

EUR/USD pushed higher, adding 0.11% to trade at 1.1368, within range of yesterday’s three-week peak of 1.1392.

The Fed chief said she expects the economic recovery to continue but noted that the U.S. central bank will not be hiking interest rates until uncertainty over the economy is resolved.

Market participants took the remarks to mean that a near-term interest rate increase if off the table.

Yellen’s comments came just days after the Labor Department reported that the U.S. economy gained just 38,000 jobs in May, the smallest growth in more than 5 years.

The dollar performed terribly against the pound and the Swiss franc, with GBP/USD adding 1.02% at 1.4592 and with USD/CHF plummeting 0.47% to 0.9659.

The Australian and New Zealand dollars also trounced the greenback, with AUD/USD adding 0.99% to trade at a one-month high of 0.7438 and with NZD/USD tacking on 0.30% to trade higher at 0.6941.

Up north, USD/CAD inched lower, shedding 0.25% to 1.2785, the weakest since May 4.

The commodity-related loonie gained broad support after oil prices rose on Tuesday, lifted by supply disruptions in Nigeria.

Elsewhere, USD/JPY inched higher, gaining 0.27% at 107.83.

The U.S. dollar index shed 0.27%, falling to 93.78, the lowest since May 11.

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