Yellen dodges question on serving a second term

Yellen dodges question on serving a second term

U.S. stocks closed higher yesterday, 12 July 2017 with the Dow industrials setting its first closing record in almost a month as Federal Reserve Chairwoman Janet Yellen emphasized the central bank's gradual approach to normalizing monetary policy and expressed optimism about the economy in congressional testimony.

Estimating a positive economic prospect for the US, Janet L Yellen, Chairwoman, Federal Reserve System Board has told the American lawmakers that the world growth is likely to boost the US exports.

The Canadian dollar rose to a more than one-year high against its US counterpart after the Bank of Canada raised interest rates for the first time in almost seven years, saying the economy no longer needed as much stimulus.

Japan's Topix index added 0.3 per cent. Australia's S&P/ASX 200 Index and South Korea's Kospi each advanced 0.4 per cent. Hang Seng futures were flat. If inflation continues to undershoot the Fed's 2% target-so-called "core" inflation has drifted downward every month this year, from 2.3% in January to 1.7% in May-then more traders may revise their expectations for Fed actions in the future.

Yellen also noted that given current estimates, the federal funds rate "would not have to rise all that much further" to reach a neutral level that neither encourages nor discourages economic activity. There is a debate over whether this might be one of her last testimonies, depending on whether she is reappointed as Fed Chair in 2018.

In what may be one of her last appearances before Congress, Ms. Yellen depicted an economy that, while growing slowly, continued to add jobs, benefited from steady household consumption and a recent jump in business investment, and was now being supported by stronger economic conditions overseas.

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In Europe, the CAC 40 in France was up 0.5 percent at 5,249 while Germany's DAX rose 0.1 percent to 12,632.

Looking ahead, Oanda analyst Craig Erlam said that with central banks elsewhere only likely to pick up the pace, the U.S. dollar may remain under some pressure for the foreseeable future.

During semiannual testimony to Congress, she fielded questions on topics ranging from the subdued labor participation rate, the Fed's $4.5 trillion balance sheet and the effect of the financial regulations on community banks.

European markets closed higher: London's FTSE rose 1.2 per cent, Paris gained 1.6 per cent and Frankfurt increased 1.5 per cent. South Korea's Kospi gained 1.2 percent to 2,419.18.

The trade-weighted index rose to 78.18 from 77.91 late yesterday.

USA crude rose 1.02 percent to $45.50 per barrel and Brent was last at $47.80, up 0.59 percent on the day.