Dollar higher after Yellen points to rate hike

The US dollar picked up strength Friday after Federal Reserve chief Janet Yellen said a first rate hike is still likely by the end of the year.

The dollar rose to as much as $1.1117 per euro before pulling back to $1.1202. It pushed to 120.49 yen and to $1.5190 per pound.

In her first comments since September 17 when the Fed again put off the long-flagged first rate increase in over nine year, Yellen said late Thursday that US economic conditions supported the move.

Most of Fed monetary policymakers "currently anticipate that achieving these conditions will likely entail an initial increase in the federal funds rate later this year, followed by a gradual pace of tightening thereafter," Yellen said.

She nevertheless hedged her comments, saying that "if the economy surprises us, our judgments about appropriate monetary policy will change."

Boris Schlossberg of BK Asset Management called Yellen's speech "much more hawkish" than her news conference comments after the Federal Open Market Committee policy meeting last week.

"It may have been also an attempt by Ms. Yellen to clarify the FOMC position and make sure that the market fully appreciates that the Fed intends to normalize policy over the near term horizon," he said.

 
2100 GMT     Friday     Thursday

EUR/USD      1.1202      1.1230

EUR/JPY      134.97      134.81

EUR/CHF      1.0959      1.0954

EUR/GBP      0.7375      0.7368

USD/JPY      120.49      120.04

USD/CHF      0.9782      0.9754

GBP/USD      1.5190      1.5242

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