Green­back un­der pres­sure as Yellen sig­nals slow hike

The China Post - - MARKETS -

The dol­lar weak­ened Thurs­day as Fed­eral Re­serve chief Janet Yellen pointed to weak­ness in the U. S. econ­omy and cau­tioned that any rises in in­ter­est rates would be slow.

The green­back eased to 123.14 yen in Tokyo from 123.43 yen in New York.

The euro t i cked up to US$ 1.1362 from US$ 1.1335 and to 139.92 yen f rom 139.91 yen de­spite ris­ing fears over a Greek debt de­fault as eu­ro­zone fi­nance min­is­ters pre­pare to meet later in the day.

Af­ter a two- day meet­ing, the Fed on Wed­nes­day held off hik­ing rates but al­tered its out­look for fu­ture rises, ex­pect­ing a lower up­ward curve than pre­vi­ously forecast.

In a news con­fer­ence, the bank’s head Janet Yellen said its first in­ter­est rate hike in nine years would likely come “later this year.”

How­ever, she added: “My col­leagues and I would like to see more decisive ev­i­dence that a mod­er­ate pace of eco­nomic growth will be sus­tained, so the con­di­tions in the la­bor mar­ket will con­tinue to im­prove and in­fla­tion will move back to 2 per­cent.”

She also voiced con­cern about Greece’s debt cri­sis, warn­ing the world econ­omy could see sig­nif­i­cant tur­moil if Athens did not reach an agree­ment with its cred­i­tors on over­haul­ing its bailout.

Fail­ure to ham­mer out a deal be­fore a debt re­pay­ment dead­line at the end of the month would see it de­fault and pos­si­bly crash out of the eu­ro­zone.

The Greek cen­tral bank also warned that fail­ure would start “a painful course that would lead ini­tially to a Greek de­fault and ul­ti­mately to the coun­try’s exit from the euro area and — most likely — from the Euro­pean Union.”

The com­ments come as fi­nance min­is­ters from the 19 eu­ro­zone coun­tries pre­pare to meet in Lux­em­bourg later Thurs­day, although sev­eral of­fi­cials said they were not ex­pect­ing a break­through.

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