Yellen’s testimony: an opportunity for USD-bulls?

Chairwoman Janet Yellen will give her first semi-annual Monetary Policy testimony before the Senate Banking Committee and House Financial Services Committee on Tuesday and Wednesday, respectively.

Market expectations point to a USD-supportive message from Chief J.Yellen this week, emphasizing the solid health of the US economy, particularly from the employment and prices fronts.

In addition, Yellen would likely add to the case that the Federal Reserve should hike rate several times throughout the current year. In this regard, CME Group’s FedWatch tool sees the probability of higher rates in June at nearly 50%, always based on Fed Funds futures prices.

Apart from monetary policy, Chairwoman J.Yellen, is expected to speak on the independence of the Fed and other supervisory roles (an omnipresent theme/concern among congressmen). Furthermore, and in light of comments (quasi-announcements) by President Donald Trump, Yellen should remain cautious on any comment referring to other forms of stimulus, particularly from the fiscal side.