Dollar Extends Losses While Stocks Rise After Yellen’s Dovish Comments

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The U.S. dollar (CURRENCY:USD) held gains against Japanese Yen but lost momentum against other global currencies today. Federal Reserve Chair Janet Yellen’s neutral comments yesterday gave a little insight on the direction of any rate hike trajectory.

Change of tone

Yellen declined to provide any specific timing for the next rate hike during her address at World Affairs Council in Philadelphia. Her response, seen as contradictory to her previous remarks, sent the greenback tumbling against both the euro and British pound. During Asian trade, EUR/USD (EURUSD) added 0.10% to 1.1366 while GBP/USD (GBPUSD) rose 0.93% to 1.4578. USD/JPY (USDJPY) managed to climb 0.23% to 107.79 during today’s session.

Stocks and oil add gains

The Asia-Pacific region registered a broadly positive day, mainly led by energy shares after oil prices closed above $50 a barrel. Asian equities hit a five-week high today as traders were hopeful that central banks are likely to remain accommodative, which has placed equities as an attractive alternative to other assets. Hang Seng (INDEXHANGSENG:HSI) closed 1.42% higher at 21,328.24 while Taiwan TSEC 50 Index finished 0.96% up at 8,679.90. An overnight rally in U.S. stocks cheered up European markets as well. DAX (INDEXDB:DAX) was up 1.39% to 10,261.60 and CAC 40 (INDEXEURO:PX1) opened 1% higher at 4,467.76.

iPath S&P GSCI Crude Oil Total Return (NYSEARCA:OIL) prices continue to extend their gains, undeterred on account of global supply disruptions. Fresh attacks near Nigerian oil supply fields fueled expectations of an extended output outage from the region, thus, suppressing concerns around an oil glut. Piper Jaffray Cos.’ Simmons & Co. International, reported citing government officials that oil supplies have come down to 1 million barrels a day from 1.8 million barrels following Nigerian attacks. During afternoon trade, Brent Crude was up 0.32% to $50.71 while West Texas Intermediate Crude Oil hovered close to $49.82, adding 0.26%.

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