US dollar down 20-40 pips across the board
The thinking after the Yellen testimony is that it removes the chance of a rate hike in September. The dollar is under pressure as a result with USD/JPY down to 113.07 from 113.50 before the comments were published.
After reading the short introductory statement, I don't see what has changed. She says the outlook is roughly balanced but I think that's a token comment because she's effusive about the upside potential.
"Ongoing job gains should continue to support the growth of incomes and, therefore, consumer spending; global economic growth should support further gains in U.S. exports; and favorable financial conditions, coupled with the prospect of continued gains in domestic and foreign spending and the ongoing recovery in drilling activity, should continue to support business investment. These developments should increase resource utilization somewhat further, thereby fostering a stronger pace of wage and price increases," Yellen's testimony says.
The market is now pricing in a 53% chance of a December hike compared to 60% previously.
I doubt we will get much more from the Q&A unless someone pries on inflation.
The move that stands out is USD/JPY because even if these comments are dovish, that's good news for the stock market and it could easily recover on that alone. Buying with a tight stop here might pay off.
