Forex – EUR/USD extends losses on Yellen comments

0 – The euro fell against the dollar on Wednesday after Federal Reserve Chari Janet Yellen said a day earlier that interest rates could rise sooner rather than later if the labor market improves, which bolstered the greenback.

In U.S. trading, EUR/USD was down 0.27% at 1.3531, up from a session low of 1.3525 and off a high of 1.3572.

The pair was likely to find support at 1.3513, the low from June 16, and resistance at 1.3640, Monday’s high.

Yellen told lawmakers in a Tuesday hearing that interest rates could rise sooner rather than later if the labor market continues to improve, especially given her observations that small-cap, biotech and other momentum stock valuations appear “stretched” these days.

Yellen was set to appear before the House of Representatives later Wednesday, though the dollar already priced in Fed expectations for rates to rise sooner if the economy improves or remain on hold if slackness persists, while stimulus programs should wrap up around October.

The dollar also firmed on the news that U.S. wholesale prices rose more than expected in June.

The U.S. producer price index rose by 0.4% in June from May, according to the U.S. Bureau of Labor Statistics, beating market calls for a 0.2% uptick.

Core producers prices rose 0.2%, in line with market expectations.

Elsewhere, the Federal Reserve reported that U.S. industrial output rose 0.2% in June, missing consensus forecasts for a 0.4% reading, which capped the dollar’s gains.

Elsewhere, the euro was down against the pound, with EUR/GBP down 0.20% at 0.7898, and down against the yen, with EUR/JPY down 0.29% at 137.57.

On Thursday, the euro zone is to release data on consumer prices.

The U.S. to publish reports on initial jobless claims, housing starts, building permits, and the Philly Fed manufacturing index.

Source By Breaking News Website | BreakingNews.WS