The dollar moved higher against the other major currencies on Tuesday, following comments by Federal Reserve Chair Janet Yellen, although investors remained cautious ahead Thursday’s British referendum on a potential exit from the European Union, or Brexit.
In prepared testimony before the Senate Banking Committee on Tuesday, Yellen outlined how the central bank was thrown off course within weeks of raising rates last December by a slowdown in domestic growth and international events.
Some of those clouds remain, Yellen said in comments that seemed to signal no pressing need for the Fed to raise rates.
The Fed president also said the Brexit referendum on Thursday is considered a possible flashpoint for the global economy if Britain decides to cut its ties with the EU.
GBP/USD was up 0.08% at 1.4704, after hitting a seven-week high of 1.4781 earlier in the day.
Investors remained cautious as the most recent poll on the U.K.’s June 23 referendum on membership in the EU showed both camps running neck and neck.
Survation’s latest and final poll before the vote showed that 45% of British citizens preferred to remain in the EU, with 44% opting for a Brexit and 11% undecided.
EUR/USD dropped 0.32% to 1.1277, off an earlier high of 1.1349.
Data earlier showed that the ZEW index of German economic sentiment rose by 12.8 points to a reading of 19.2 in June. Economists had expected the index to decline to 4.7.
But the single currency came under pressure after European Central Bank President Mario Draghi said euro zone growth is gaining momentum but uncertainty remains high, partly due to the June 23 Brexit vote.
Draghi added that the ECB stands ready to act with all instruments if necessary.
The dollar was higher against the yen, with USD/JPY up 0.63% at 104.60 and remained lower against the the Swiss franc, with USD/CHF down 0.41% at 0.9577.
Earlier Tuesday, Japan’s Finance Minister Taro Aso said Tuesday that officials would not intervene in the currency market lightly.
The comments came amid concerns over recent strong gains in the safe haven yen, which tends to be bought by investors in times of heightened market uncertainty.
The Australian and New Zealand dollars were stronger, with AUD/USD up 0.16% at 0.7470 and with NZD/USD adding 0.25% to 0.7138.
Elsewhere, USD/CAD was little changed at 1.2813.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.21% at 93.88, off a one-week low of 93.47 hit earlier in the session.