The U.S. Dollar is racing up against major currencies ahead of an awaited speech from the Federal Reserve Chair, Janet Yellen today. Yellen’s comments today will be crucial in driving both the currency and equities markets as a handful of Fed officials have already indicated at growing possibilities of rate hikes sooner rather than later.

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Crucial for markets

The import of Yellen’s comments could be outsized most as she has kept her tone guarded over the rate hike outlook so far. During Asian trade, EUR/USD turned 0.14% down at 1.1181. The pound sterling fell 0.08% to 1.4243 against the greenback.

The rally in the dollar came to a standstill yesterday after U.S. consumer spending and inflation data came in weaker than anticipated. According to the Commerce Department, personal spending in the U.S. grew 0.1% in February, matching economists’ projections. The PCE index reading slipped 0.1% in February and stood at 1% year-on-year. The data served as an indication that rate hikes might not be undertaken as aggressively as expected by the market.

Mixed data in Japan

Meanwhile, the dollar pushed higher against the Japanese Yen by 0.24% to 113.71. The weakness in the yen is on account of mixed unemployment, household spending and retail sales data.

As per the published report, household spending in Japan grew 1.2% in February, underperforming projections of 1.5% fall year-on-year. However, the unemployment reading came higher at 3.3% against estimates of 3.2%. Retail sales in Japan increased marginally by 0.5% versus forecasts of 1.7% rise year-on-year. Apart from this, the pressure on the yen remains as Prime Minister Shinzo Abe reiterated that the sales tax hike will not be put on hold and will be hiked in April. The comments disappointed market participants, who were seeing a possible delay in the sales tax hike in the wake of the fragile Japanese economy.

The. U.S. Dollar Index for June rallied by 0.10% to 96.09.