By James Ramage
The dollar held steady against major currencies Wednesday after
Federal Reserve Chairwoman Janet Yellen indicated in a speech that
the central bank has no plans to raise interest rates ahead of
schedule.
The greenback maintained its 0.3% gain against the yen, at
¥102.26, as well as its 0.1% loss against the euro, at $1.3830.
Investors have heard Ms. Yellen reiterate recently a
monetary-policy position that includes keeping U.S. interest rates
low. They expected no significant deviation from this stance in
Wednesday's comments, said Ken Wills, senior corporate dealer at
USForex. Ms. Yellen spoke at the Economic Club of New York.
"There was nothing surprising from her comments to cause the
dollar to move drastically," Mr. Wills said. "The dollar will
continue to trade within current ranges and is likely to have more
of a reaction around fundamental data as they come in, the key
being employment."
Investors tend to buy dollars and dollar-denominated assets when
interest rates climb, as those assets would gain in value against
the currencies of countries where interest rates fall or remain
low. Most in the currency market don't expect U.S. interest rates
to rise until around the middle of 2015.
Ms. Yellen continued to present inflation and unemployment as
the primary factors the Fed would use to assess of the health of
the U.S. economy.
The risk of persistently low consumer prices outweighed that of
high inflation, she said. Fed officials also see room for
unemployment to fall to between 5.2% and 5.6% by the end of 2016,
Ms. Yellen said. The unemployment rate stands at 6.7%.
Write to James Ramage at james.ramage@wsj.com