EUR/USD ticks up, as Yellen holds her cards close to the vest - -- EUR/USD inched up, as the dollar recovered from a mid-day swoon after Janet Yellen kept investors on their heels regarding the possibility of a summer interest rate hike with relatively neutral comments on the Federal Reserve's long-term path on Monday afternoon.

The currency pair traded in a tight range between 1.1326 and 1.1393, before settling at 1.1357, up 0.0008 or 0.05% on the session. The euro extended gains from last Friday when it surged nearly 2% against the dollar following the release of the weakest U.S. monthly jobs data in nearly six years. With the slight gains, the euro remained near three-week highs against its American counterpart.

EUR/USD likely gained support at 1.1055, the low from March 15 and was met with resistance at 1.1616, the high from May 3.

Addressing a crowd at a World Affairs Council event in Philadelphia, the chair of the Federal Open Market Committee (FOMC) declined to set a specific timetable for the U.S. central bank's next interest rate hike. It marked a stark contrast from Yellen's stance less than two weeks ago when she sent strong indications that the Fed could raise rates in the coming months if inflationary and labor market gains continued to meet the FOMC's expectations. Last Friday, though, the U.S. Labor Department reported that nonfarm payrolls increased by only 38,000 in May, amounting to less than one-quarter of market expectations. By comparison, Yellen noted that the economy added 2.7 million jobs in 2015 or an average of 230,000 a month last year. In December, Yellen said in a speech at the Economic Club of Washington that the economy needed to add approximately 100,000 jobs a month in order to absorb new employees into the labor force.

Weeks later, the Federal Open Market Committee (FOMC) abandoned a seven-year zero interest rate policy by raising interest rates for the first time in nearly a decade. The FOMC has left the target range of its benchmark Federal Funds Rate unchanged at a range between 0.25 and 0.50% in each of its first three meetings this year.

"If incoming data are consistent with labor market conditions strengthening and inflation making progress toward our 2 percent objective as I expect, further gradual increases in the Federal Funds Rate are likely to be appropriate," Yellen said.

Also on Monday, the Federal Reserve Bank of New York announced that it awarded $53.35 billion in one-day reverse repurchase agreements to three dozen bidders at a rate of 0.25%. Reverse repurchase agreements or reverse repo's are a tool that allows the Fed to set a floor on the interest rates within an economy. The Fed considers reverse repos to be a critical mechanism for stabilizing interest rates in the current tightening cycle.

Yellen cautioned economists not to attach too much significance to one weak report. She also emphasized that average hourly earnings in the U.S. have increased 2.5% over the last 12 months, providing indications that wage growth may be on the verge of accelerating further.

Yellen also devoted a significant portion of her speech addressing broad areas of uncertainty within the global economy at large. Though Yellen noted that foreign headwinds have faded as the yuan has stabilized and Chinese outflows have abated in recent months, she said a potential Brexit by the U.K. from the European Union could bring "significant repercussions," to the economy. Yellen also reiterated that she expects inflation to move toward the Fed's long-term 2% goal in one to two years, as long as oil prices avoid further declines and the dollar avoids unforeseen shocks. In addition, Yellen appeared bullish on the U.S. economy overall, arguing that she expects it to continue to show progress amid "considerable global bumpiness," due in part to strong consumer sentiment.

"As I said, the positive economic forces have outweighed the negative, and despite the challenges that the economy continues to face, I continue to expect further progress toward our employment and inflation objectives," Yellen said.

The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, gained more than 0.20% to an intraday high of 94.27 before settling at 94.03. The index has tumbled more than 5% since early-December. offers an extensive set of professional tools for the financial markets.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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