Janet Yellen, Chair of the Federal Reserve, begins her two-day testimony in front of Senate and House lawmakers later this morning. She is expected to give an account of monetary policy at a time when many are expressing dissatisfaction with the American economy. The dollar has fallen ahead of her appearance, declining for the fifth day in the longest run of losses since the beginning of April. European Central Bank President Mario Draghi has just taken the stage in Brussels. His statements, which began at 9 a.m. ET, are now tanking the euro, which had seen its longest climb against the dollar in weeks in the lead-up to his appearance. Draghi is speaking about further stimulus.
Meanwhile, the pound’s recovery is continuing this morning: the sterling surged about 3.5% in the previous two days, and is strengthening for a third day. Even though polls show a close call between the “leave” and “remain” sides on the issue of Brexit, investors are taking a positive cue from the events, advancing global stocks, while easing haven demand for gold and the Japanese yen. The MSCI All-Country World Index, which measures performance of equities throughout the world, has risen to the highest level in more than a week.
Australia saw its own central bank action overnight, with the Reserve Bank of Australia releasing minutes from its last policy meeting. Usually a risk event for the currency, the Aussie dollar advanced for the third day after the minutes highlighted recent positive economic data and outlined no change for interest rates.
EURUSD: Euro falls after Draghi says further stimulus is coming.
GBPUSD: Pound continues its rally as markets become more confident.
AUDUSD: Aussie dollar rises on upbeat RBA meeting minutes.
USDCAD: Canadian dollar strengthens against USD as the greenback weakens in lead-up to Yellen’s testimony.