Channel NewsAsia

Dollar dips against euro

The dollar slipped against the euro on Monday as traders appeared cautious ahead of Federal Reserve chief Janet Yellen's inaugural testimony to Congress this week.

NEW YORK: The dollar slipped against the euro on Monday as traders appeared cautious ahead of Federal Reserve chief Janet Yellen's inaugural testimony to Congress this week.

The euro ticked up to $1.3642 around 2200 GMT, from $1.3637 late Friday.

The dollar also weakened slightly against the Japanese currency, buying 102.18 yen compared with 102.30 yen.

The euro slipped to 139.46 yen from 139.52.

Yellen is set to testify to a House of Representatives committee Tuesday on the state of the US economy and the course of monetary policy.

It will be the first time the new Fed chair presents Congress with the central bank's semi-annual testimony after succeeding Ben Bernanke on February 1. She will appear at a similar hearing in the Senate on Thursday.

Following on the heels of last Friday's weak January jobs report -- the second disappointing report in a row -- Yellen's testimony is expected to be closely scrutinized to see if she suggests the Fed's taper of its massive stimulus may be slowed.

"Traders are likely on the sidelines in hopes of receiving a bit of clarity on the Fed's taper plans going forward," said Christopher Vecchio, currency analyst at DailyFX.

Yellen's testimony "might be the best insight into the mind of the new Fed chair -- though we wouldn't look for a major change, as no Fed chair has announced a formal shift in policy at a congressional testimony," he said.

Kathy Lien of BK Asset Management said there was no doubt that lawmakers would question Yellen about the Fed's unemployment rate threshold of 6.5 per cent for considering tightening its near-zero interest rate. The jobless rate fell to 6.7 per cent in January.

Lien predicted that Yellen would say the Federal Open Market Committee would re-evaluate its forward guidance at its next meeting in March.

"Yet it may be difficult for her to dance around all of the questions from Congress without revealing some of her plans for monetary policy," Lien said.

The dollar dipped to 0.8969 Swiss franc from 0.8977 franc on Friday.

The pound weakened a bit against the greenback, buying $1.6401 compared with $1.6407.

Tweet Photos, Videos and Update on this Story to  #cna