Wall St set to open flat ahead of Yellen’s testimony

The dollar index slipped just 0.1 percent to 99.989, easing from Tuesday’s high of 100.26 but still nearly 5 percent higher than a trough hit before Donald Trump won the race for the White House a week ago.

A further pickup in inflation could help solidify a December rate increase.

The U.S. currency extended gains, reaching its strongest level in 2016 against the euro, after Federal Reserve Bank of St. Louis President James Bullard said the economy could get a medium-term boost from Trump’s policies.

Mr. Bullard, a voting member of the US central bank’s rate-setting committee, made his comments at a banking conference in London.

Mr. Bullard is a voting member of the Federal Open Market Committee.

With no major data due Monday, investors were accessing the U.S. economic prospects under a Trump administration.

In late September, Fed chair Janet Yellen said she believed the US economy was ready for a rate hike by the end of the year.

Treasury 10-year note yields rose four basis points, or 0.04 percentage point, at 2.26 percent as of 8:55 a.m.in NY, according to Bloomberg Bond Trader data.

“After the USA election result came out, the local bond market experienced fluctuation in the rise of yield rate”, said Park Jong-yeon, a researcher at NH Research Center.

There is, Yellen said, still “room to run” in the US recovery, and rate increases can likely proceed on a gradual basis.

An inflation gauge monitored by the Fed, the price index for personal consumption expenditures, rose to an annual rate of 1.2 percent in September.

But beyond that, he does not want any more increases – a view which has not changed since the Presidential election.

In the two weeks since the last FOMC meeting, the unemployment rate fell a tenth of a point to 4.9 percent and the economy added 161,000 jobs – marking 73 consecutive months of job growth.

Bond investor Jeff Gundlach, head of DoubleLine Funds, said before the rate hike in December 2015 that WIRP should be above 70% to make the Fed comfortable enough to hike.

The euro deteriorated to its weakest level in nearly a year against the greenback. Trump secured the USA presidency on pledges that included tax cuts and more than $500 billion in infrastructure spending.

The spot gold price inched higher during Asian trading hours on Wednesday November 16 as the US dollar softened in the morning, though near-term downward pressure is still seen as expectations are for the US dollar to stay strong and for the US Federal Reserve to lift interest rates in December.