US Dollar spikes toward 97 on hawkish Yellen

During Fed's Chairwoman Janet Yellen's press conference, the US Dollar Index, which tracks the greenback against a basket of six trade-weighted peers, leaped to 96.95 and is now at 96.90, down 0.06% on the day.

Yellen during her statement downplayed today's disappointing inflation figures by explaining that it was important not to overreact to a few inflation readings and sounded optimistic about the economy as she reiterated that the job growth is well above pace needed to absorb new entrants to the labor force. She further added that additional gradual rate hikes will be appropriate over the next few years.

• Fed's Yellen: Important not to overreact to a few inflation readings; data can be noisy
• Fed's Yellen: Employment is near maximum sustainable level

Following her statement, responding to a question from the press, Yellen said that she fully intends to serve out her term as the Chair, easing concerns over Fed's independence from the Trump administration. 

• Fed's Yellen: Fully intends to serve out term as Chair

Technical outlook

With a decisive break above 97 (psychological level), the index could aim for 97.50 (May 26 high) and 98 (May 18 high/psychological level). On the downside, supports could be encountered at 96.30 (daily low), 95.90 (Nov. 11 low) and 95 (psychological level).

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