Dollar Rises As Fed's Yellen Cautions On Early Rate Hike

(RTTNews) - The U.S. dollar gained ground against the other major currencies on Friday, as the Federal Reserve Chair Janet Yellen warned that rate hikes could come sooner than expected if the the U.S. economic recovery is sustained.

"If progress in the labor market continues to be more rapid than anticipated or if inflation moves up more rapidly than anticipated, resulting in faster convergence toward our dual objectives, then increases in the federal funds rate target could come sooner than the Committee currently expects and could be more rapid thereafter," Yellen said in speech delivered to fellow central bankers at the Fed's annual Jackson Hole symposium.

However, the Fed's internal labor market indicators suggest that the recent decline in the unemployment rate overstates the improvement in overall labor market conditions, Yellen said.

The greenback climbed above the key 104.00 level against the yen, rising to near a 5-month high of 104.04. This may be compared to an early 2-day low of 103.49. Next likely resistance for the greenback may be eyed around the 104.50 zone.

Reversing from an early 2-day low of 0.9103 against the Swiss franc, the greenback climbed to 0.9141 upon Yellen's speech. The next possible resistance for the greenback is seen around the 0.92 level.

Having fallen to 1.3296 against the euro around 2:15 am ET, the greenback reversed direction and spiked up to near a 1-year high of 1.3237. If the greenback continues its rise, 1.32 is seen as its next possible resistance level.

The greenback rose back to 1.6567 against the Sterling, coming off from an early low of 1.6595. The greenback is poised to challenge resistance around the 1.65 mark.

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