The dollar and prices in global equity markets were little changed yesterday as investors awaited the first congressional testimony of new Federal Reserve chief Janet Yellen after a weak labour market report for January left investors skittish.
US stocks were mixed on the heels of the benchmark S&P 500’s best two-day performance in four months late last week, while a measure of global equity activity and a broad European stock index rose slightly.
The US Labor Department reported on Friday that non-farm payrolls rose by 113,000 last month, well below the consensus forecast of 185,000.
But investors attributed the disappointing data to inclement weather and bid stocks higher.
The dollar held steady against major currencies yesterday as traders waited to hear the economic and policy views of Yellen, who is viewed as an architect of the US central bank’s current ultra-loose monetary policy.
Yellen appears before the Republican-controlled House Financial Services Committee today and Democrat-led Senate Banking Committee on Thursday.
“It doesn’t provide a lot of incentive to move the dollar out of its current trading range,” said Bob Lynch, head of G10 FX strategy at HSBC Bank USA in New York.
The dollar index last traded down 0.07 per cent at 80.637, and the greenback was mildly weaker versus the yen at 102.17 yen, down 0.16 per cent on the day.
The euro rose 0.06 per cent against the dollar at $1.3641. MSCI’s all-country equity index, a measure of global equity markets, rose 0.15 per cent, while the pan-European FTSEurofirst 300 closed up 0.08 per cent at 1,301.09.
The Dow Jones industrial average fell 20.40 points, or 0.13 per cent, at 15,773.68. The Standard & Poor’s 500 Index was down 0.69 points, or 0.04 per cent, at 1,796.33.
The Nasdaq Composite Index was up 10.99 points, or 0.27 per cent, at 4,136.85.
Yellen is expected to stay the course with slowly winding down the Fed’s bond buying program this year, a process termed the “taper.”
The Fed has been cutting bond purchases by $10 billion a month as the US economy improved.
Bond buying has largely supported commodity and equity markets.
“The overall sentiment is ‘steady as she goes’,” said Tariq Zahir, managing member of commodity trading adviser Tyche Capital Advisors in New York. “I don’t think there’s going to be a taper of the taper.”
Benchmark safe-haven bonds, including US Treasuries and German Bunds, maintained tight ranges as investors looked to a string of risk events this week.
The benchmark US Treasury 10-year note fell 2/32 in price to yield 2.6802 per cent in a see-saw session. Bund futures settled down 18 ticks at €143.65.