Yellen sees growing confidence in US

The US Fed Chair said that the inflation in USA economy was in control and the employment had improved.

The Reserve Bank of New Zealand is considered nearly certain to lower rates next week, while Australia’s central Bank is still seen keeping an easing bias for now.

But many Republican lawmakers were less than satisfied.

Yellen voiced optimism that inflation would continue to inch upward.

Yellen strongly rejected the idea.

Investors in Europe will now turn their attention to the ECB meeting and in particular what president Mario Draghi says about the funding of Greek banks, which have been closed for over two weeks.

The favourable interest rate outlook lifted the trade-weighted value of the dollar to a six-week high of 97.4 on Thursday, and pushed the euro to a six-week low of $1.09.

The interest rate move has been put off several times this year because of a range of different obstacles, such as the country’s economic contraction in the first quarter, a slowdown in China’s economy and Greece’s default on debt to the global Monetary Fund.

Yellen’s semi-annual testimony to the U.S. House of Representatives at 1400 GMT is likely to reiterate that it will be appropriate to raise interest rates later this year.

On monetary policy, Yellen said that she did not believe the Fed is overly influenced by concerns about financial markets.

However, Ms Yellen said overseas growth could improve quicker than people expect. Those affect saving, investment, exports and other components of the economy. “Although the recovery in the euro area appears to have gained a firmer footing, the situation in Greece remains hard”, she said.

The greenback jumped after Federal Reserve Chair Janet Yellen said a September rate rise is possible.

She added that the Fed’s decision on when to hike rates will remain data-dependent.

In prepared testimony to Congress, Yellen expressed relative confidence in the economy going ahead, suggesting it could surprise on the upside. Higher rates curb gold’s appeal because the metal doesn’t pay interest or give returns like assets such as bonds and equities. Lawmakers in both the House and Senate have introduced legislation to rein in the Fed’s independence, measures that the central bank have warned could damage the independence the Fed needs to maintain its credibility with financial markets.

Yellen’s statement was submitted to the committee along with a lengthier report from the Fed board on the state of the economy and financial markets.

“If anyone is trying to sweep this under the rug, it is the Fed”, he said.