Dollar weakened broadly on dovish comments from Fed chair Janet Yellen. As Yellen spoke at the Economic Club of New York, she suggested that it is "appropriate for the committee to proceed cautiously in adjusting policy... This caution is especially warranted because, with the federal funds rate so low, the FOMC's ability to use conventional monetary policy to respond to economic disturbances is asymmetric". Her comments were echoed by San Francisco Fed President John Williams who indicated that the pace of rate hikes would be "gradual and thoughtful" and it is "going to take at least six years to get the balance sheet back to normal, which is in keeping with the overall approach to removing accommodation gradually".
Dollar index breaches 95 handle on yesterday's selloff and the development affirmed the case that recent recovery is already completed at 96.40. Fall from 100.51 is likely resuming. Intraday bias is on the downside for 94.57 support first. Break will confirm this bearish case and target next key level at 92.62. So far, fall from 100.51 is viewed as the third leg of the consolidation pattern from 100.39. Thus, we'd expect strong support from 38.2% retracement of 78.90 to 100.39 at 92.18 to contain downside an bring up trend resumption at a later stage.
On the data front, New Zealand building permits rose 10.8% mom in February. Japan industrial production dropped -6.2% mom in February. Swiss UBS consumption indicator rose to 1.53 in February. Swiss will release KOF leading indicator in European session. Eurozone will release confidence indicators and German CPI. Nonetheless, US ADP employment will be the main focus today.