The U.S. dollar fell against most major currencies on Wednesday as investors were digesting the Federal Reserve Chair Janet Yellen's testimony.
"The (Federal Open Market) Committee continues to expect that the evolution of the economy will warrant gradual increases in the federal funds rate over time to achieve and maintain maximum employment and stable prices," Yellen said in her prepared testimony before the U.S. House Financial Services Committee on Wednesday.
According to the central bank chief, the benchmark interest rate might not be far away from the neutral one where the economy reaches full employment, runs in line with trend growth and poses stable prices.
"Because the neutral rate is currently quite low by historical standards, the federal funds rate would not have to rise all that much further to get to a neutral policy stance," said Yellen.
Moreover, inflation in the U.S. has softened in recent months, which triggers discussions about the pace and timing of the future rate hikes among Fed officials.
Fed Governor Lael Brainard said on Tuesday that she would want to assess the inflation process closely before making a determination on further interest rate hikes.
In late New York trading, the euro fell to 1.1416 U.S. dollars from 1.1475 U.S. dollars, and the British pound rose to 1.2890 U.S. dollars from 1.2853 U.S. dollars in the previous session. The Australian dollar added to 0.7679 U.S. dollar from 0.7642 U.S. dollar. The U.S. dollar bought 113.25 Japanese yen, lower than 113.83 yen of the previous session. The U.S. dollar rose to 0.9652 Swiss franc from 0.9631 Swiss franc, and it edged down to 1.2720 Canadian dollars from 1.2920 Canadian dollars.
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