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    Greenback hovers over four-week lows as Yellen remains cautious

    The U.S. dollar edged higher, but still traded around four-week lows against its major counterparts on Tuesday, after the Federal Reserve Chair’s comments failed to provide support to the falling greenback.

    The U.S. dollar index inched up 0.1% to 94.017, but remained close to yesterday’s bottom of 93.634, its lowest level since the 11th of May 2016.

    While the Fed Chair Janet Yellen was rather optimistic about the general outlook of the economy and stated that the U.S. central bank would raise interest rates, she gave no new clues about the timing of a future rate hike and called May’s labour market data disappointing.

    The greenback has been under pressure since the release of the U.S. nonfarm payrolls report last Friday that indicated the slowest job growth in more than five years in May, disappointing expectations for a near-term rate hike.  

    Against the Japanese yen, the greenback recovered from its earlier losses and inched up 0.2% to 107.81, drifting away from the previous session’s trough of 106.35, its weakest level in a month.

    Earlier on Tuesday, the Japanese Finance Minister Taro Aso stated that he would refrain from commenting on the country’s possible reaction in the foreign exchange market if the yen were to appreciate even further.  

    The single currency rose 0.1% to 1.1360, shifting back towards the previous session’s nearly one-month peak of 1.1393.

    The volatile British pound registered a strong rebound, after falling more than 1% to three-week lows in the previous session, in light of a number of polls favouring the possibility of Britons voting to leave the E.U.

    However, two polls revealed in Tuesday that British voters favour remaining in the E.U., as opposed to the surveys released a day before. The sterling edged higher 0.7% to 1.4524, after reaching a one-week high of 1.4664.
     
    The Aussie inched up 0.6% to 0.7413 to one-month highs after the Australian central bank announced its decision to leave monetary policy unchanged, in line with expectations, and stated that its decision was consistent with sustainable growth.

    Investors’ focus will now shift to the eurozone’s gross domestic product report, expected to remain unchanged at 0.5% quarter-over-quarter and 1.5% year-over-year. 

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