The US dollar strengthened after Fed Chair Janet Yellen said rates would probably be increased gradually once economic data improved and certain parameters were met.
The Fed statement signals policy makers are shifting to a more hawkish stance and showed that the4 Fed seems to have adopted a clearer stance on the timing of raising interest rates.
The dollar rose 1.9 percent on Wednesday, the biggest advance since October 31. The greenback traded at $1.2342 per euro early today after appreciating to $1.2321, matching the strongest since December 9. The yen gained 0.2 percent to 146.13 per euro.
The Fed Chair basically put more to the US central bank’s monetary policy plans, saying it was on course to raise interest rates, though not right away, after officials issued a statement that some Fed-watchers found confusing.
Yellen told reporters following a two-day meeting that the Fed is likely to hold interest rates near zero at least through the first quarter. She also laid out the economic parameters that would need to be met for liftoff to begin later in the year and said that rates probably would be raised gradually thereafter. They may not return to more normal levels until 2017, she added.
Source:: Yellen clarifies Fed policy