Janet Yellen – Hawkish or Dovish?
There are quite a few important forex events scheduled on the calendar this week. Two of them are already past us, with Trump entering the White House tomorrow as being yet to come.
Yellen´s press conference last evening was one of these events. Central bankers love to kick the hell out of their own currency and Yellen is no exception, but somehow the USD bulls found her comments very appetising for them.
So, what was it that made the USD buyers think they can take the upper hand?
Actually, nothing in particular was bullish enough to justify yesterday´s upward move in USD. Sure there were hawkish comments, but we have heard them before.
In fact, this speech was a bit more dovish than expected, in my opinion, and El-Erian of Allianz thinks so as well. Some of the dovish comments are highlighted below:
– Low productivity will keep rate hikes gradual.
– Strong Buck is a big risk for the US economy this year.
– This could fuel protectionism.
These are definitely dovish remarks, so this USD move might have come because the forex market was probably expecting her to be even more dovish after Trump failed to mention any fiscal stimulus last week. Or perhaps this is the end of the long term retrace that we have seen since 2017 started.
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