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    European Session – Dollar in focus as Fed Chair Yellen due to speak

    News flow was limited during the European session on Tuesday but the market’s focus was on Fed Chair Janet Yellen’s speech at the Economics Club of New York later in the day. Meanwhile, earlier today in a speech in Singapore, San Francisco Fed President John Williams urged the Fed to stay on track with rate rises.

    The dollar was mixed against its major counterparts today and US data on home prices and consumer confidence had little impact on the currency.

    The pound rallied against the dollar, extending yesterday’s advance, and reached near its highest level in a week at $1.4307. The Bank of England’s financial policy committee highlighted the risk to financial stability from Brexit.

    The euro was also up against the dollar today to reach a one-week high of $1.1224. The Australian dollar was one of the worst performers against the greenback as commodity prices fell today. AUDUSD fell to as low as $0.7509. The Canadian dollar fared better despite the tumble in US oil futures to $38 a barrel. USDCAD slid to $1.3150.

    The dollar performed well against the broadly weaker yen and climbed to a fresh two-week high of 113.79 yen, fully retracing its post-FOMC drop from March 16.

    The greenback showed little reaction to the US Conference Board consumer confidence index, which improved in March after decreasing in February. The index now stands at 96.2 from 94.0 in February. Meanwhile, the latest results for the S&P/Case-Shiller home price index, the leading measure of US home prices, showed that in January 2016, home prices continued their rise across the country over the last 12 months.

    All eyes are clearly on Janet Yellen’s speech at 12:20 p.m. New York time. This will be her first major event since the FOMC meeting, which was considered by the markets to be dovish, as the Fed scaled back the number of rate hikes this year from four to two. Since then, several Fed speakers came out to talk, with at least four sounding more hawkish and supported more rate hikes and suggested a rate increase could be coming soon.

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