Investing.com - The dollar carried Tuesday''s gains against most major currencies into Wednesday on Federal Reserve Chair Janet Yellen''s comments to U.S. lawmakers that the economy is improving despite slack in the labor market and added rates could rise sooner if that slackness continues to wane.
In U.S. trading on Wednesday, EUR/USD was up 0.32% at 1.3524.
Yellen told lawmakers in a Tuesday hearing that interest rates could rise sooner rather than later if the labor market continues to improve, especially given her observations that small-cap, biotech and other momentum stock valuations appear "stretched" these days.
Yellen was set to appear before the House of Representatives later Wednesday, though the dollar already priced in Fed expectations for rates to rise sooner if the economy improves or remain on hold if slackness persists, while stimulus programs should wrap up around October.
The dollar also firmed on the news that U.S. wholesale prices rose more than expected in June.
The U.S. producer price index rose by 0.4% in June from May, according to the U.S. Bureau of Labor Statistics, beating market calls for a 0.2% uptick.
Core producers prices rose 0.2%, in line with market expectations.
Elsewhere, the Federal Reserve reported that U.S. industrial output rose 0.2% in June, missing consensus forecasts for a 0.4% reading, which capped the dollar''s gains.
The dollar was up against the yen, with USD/JPY up 0.04% at 101.72, and up against the Swiss franc, with USD/CHF up 0.33% at 0.8987.
The greenback was up against the pound, with GBP/USD down 0.05% at 1.7135.
In the U.K., the Office for National Statistics said that the claimant count, or the number of people claiming unemployment benefit, fell by 36,300 in June, exceeding expectations for a decline of 27,000. May’s figure was revised to 32,800 from a previously reported decline of 27,400.
The unemployment rate declined to 6.5% in the three months to May, from 6.6% in the previous three months.
The robust employment report added to indications that the economic recovery in the U.K. is deepening, fuelling expectations that the Bank of England will hike rates before the end of the year.
However, the report showed that growth in real wages remains weak.
Average weekly earnings, excluding bonuses, rose by an annualized 0.7% in the three months to May, the slowest since record began in 2001. The annual rate of inflation over the same period was 1.6%.
The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.13% at 1.0744, AUD/USD down 0.07% at 0.9363 and NZD/USD down 0.70% at 0.8707.
The Bank of Canada said earlier it was leaving its overnight cash rate unchanged at 1%, in line with expectations.
The bank attribute a recent increase in inflation to temporary factors rather than any change in domestic economic fundamentals.
In its rate statement, the central bank said its monetary policy stance was neutral and added that the future direction of monetary policy would be data dependent.
The BoC also revised down its forecast for economic growth saying it now expected growth of around 2.25% during 2014–2016.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.24% at 80.63.
Please LIKE our Facebook page - it makes us stronger: