Dollar flat as Yellen testimony dents future rate hike expectations

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"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 in her prepared testimony before the U.S. House Financial Services Committee.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.2 percent to its highest since May 2015, as Yellen sounded cautious on inflation and noted on Wednesday the Fed would not need to raise rates "all that much further" to reach current low estimates of the neutral funds rate.

The dollar eased against the yen on Wednesday, after Federal Reserve Chair Janet Yellen said interest rates hikes would be gradual and that the USA central bank may not be able to raise rates by "all that much". The economy grew only 1.4 percent in the first quarter, while inflation remains below the 2 percent target.

It would be "quite challenging" for the U.S. to reach the 3% growth target set by President Donald Trump, Yellen told a Senate committee today. "She said inflation response to economy is a key uncertainty, alluding to the inflation again, part of the dovishness". In its policy meeting in June, the Fed announced detailed plan on how to reduce its balance sheet.

However, on reflection, the market has considered there will be at least one more hike in the Fed Interest rate in 2017 and 3 in 2018, and for the time being has sold the Dollars.

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Down Under, the S&P/ASX 200 rose 0.47 percent.

At 10:47 a.m. ET (1447 GMT), the Dow Jones Industrial Average was up 146.9 points, or 0.69 percent, at 21,555.97.

Investors will be keeping an eye on second-quarter earnings reports on Friday from big USA banks including JPMorgan Chase, Wells Fargo and Citigroup.

The Kospi advanced 0.17 percent to trade above the 2,410 level, making gains for a second-straight day after closing at a record level in the last session. The stock was among the biggest boosts on the Nasdaq.

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