Dollar Dumped As Yellen Dances Around Monetary Policy

The dollar slid on Friday after Fed chief Janet Yellen made no signals about monetary policy, while US stocks ticked higher on hopes of tax reform

LONDON, , (APP - UrduPoint / Pakistan Point News - 25th Aug, 2017 ) - The Dollar slid on Friday after Fed chief Janet Yellen made no signals about monetary policy, while US stocks ticked higher on hopes of tax reform.

During a much anticipated address at an annual economists' symposium at Jackson Hole, Wyoming, Yellen steered clear of comments on the Fed's plans to begin cutting down on its huge holdings of bonds and the possibility of raising interest rates again this year.

Instead, she defended regulations adopted after the 2008 financial meltdown, saying they promoted stability and growth, effectively rebutting White House calls for a roll-back. "Traders dumped the US dollar after Yellen failed to discuss monetary policy," said market analyst David Madden at CMC Markets UK.

European Central Bank (ECB) head Mario Draghi was due to speak later. The euro has rallied in recent weeks on speculation the ECB will begin to wind down its crisis-era stimulus measures as the eurozone continues to improve.

European stocks turned slightly lower in late trading as the euro and pound rose against the dollar. US stocks, however, made gains on renewed hopes of tax reform. "The Dow Jones, S&P 500 and NASDAQ 100 have all opened higher today as investors are buying equities on the back of comments from Gary Cohn, Trump's chief economic advisor, that the US president will launch plans to bring in tax reforms next week," said Madden.

US equities have struggled this week as Donald Trump berated top members of his Republican party, threatened to shut down the government and rip up a key trade deal with Canada and Mexico. His ongoing battle with Capitol Hill has fanned fears the tycoon will not be able to push through his promised tax cuts, deregulation and infrastructure spending programme, which many believe would help fire up the US economy.

In Asia on Friday, Tokyo's Nikkei stocks index ended 0.5-percent higher on a weaker yen. Hong Kong jumped 1.2 percent, marking a fourth-straight day of gains, while Shanghai rallied 1.8 percent.

Energy firms in both cities were lifted by rocketing profits at PetroChina and subsequent dividend payouts. Seoul's main index rose 0.1 percent, with market heavyweight samsung Electronics losing more than one percent after company heir Lee Jae-Yong was jailed for five years for bribery, perjury and other crimes linked to the corruption scandal that brought down ousted president Park Geun-Hye.

Elsewhere, oil prices gained as Hurricane Harvey barrelled towards the crude-rich Texas coastline, causing the closure and evacuation of platforms. The Gulf Coast is home to around half the United States' refining capacity.

"As refineries and terminals start slowing or shutting down operations, gasoline prices spiked on fears... of damage to facilities," said Sukrit Vijayakar of energy consultancy Trifecta. - Key figures around 1530 GMT - =============================== London - FTSE 100: DOWN 0.08 percent at 7,401 points (close) Frankfurt - DAX 30: DOWN 0.1 percent at 12,167.94 (close) Paris - CAC 40: DOWN 0.2 percent at 5,104.33 (close) EURO STOXX 50: DOWN 0.1 percent at 3,441.51 New York - Dow: UP 0.2 percent at 21,831.77 Tokyo - Nikkei 225: UP 0.5 percent at 19,452.61 (close) Hong Kong - Hang Seng: UP 1.2 percent at 27,848.16 (close) Shanghai - Composite: UP 1.8 percent at 3,331.52 (close) Euro/dollar: UP at $1.1876 from $1.1800 at 2100 GMT Pound/dollar: UP at $1.2878 from $1.2799 Dollar/yen: DOWN at 109.21 Yen from 109.26 yen Oil - Brent North Sea: UP nine cents at $51.75 per barrel Oil - West Texas Intermediate: UP 21 cents at $47.64