Investing.com - Federal Reserve Chair Janet Yellen provided more clarity on when U.S. interest rates might start to rise on Tuesday, sending the dollar broadly higher.
In prepared remarks released before her testimony to the Senate Banking Committee, Fed Chair Yellen said that the central bank will change its forward guidance in an effort to increase the Fed's flexibility and mute any potential market reaction before beginning to hike rates.
According to Yellen, the central bank will first drop the word "patient" from its statement. However, that does not mean that a rate hike will automatically follow in a couple of meetings.
Market players had previously thought dropping the "patient" reference meant that the Fed will start raising rates in a couple of meetings.
Instead, the Fed will consider interest rate hikes "on a meeting by meeting basis," if economic conditions continue to improve, as the Committee anticipates.
EUR/USD was trading at 1.1309 from around 1.1323 ahead of Yellen’s comments, GBP/USD was at 1.5420 from 1.5434 earlier, while USD/JPY was at 119.68 from 119.57 earlier.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 94.91, compared to 94.82 ahead of the report.
Meanwhile, U.S. stock markets were mixed. The Dow 30 rose 0.15%, the S&P 500 tacked on 0.1%, while the Nasdaq 100 inched down 0.1%.
Elsewhere, in the commodities market, gold futures traded at $1,192.80 a troy ounce, compared to $1,196.40 ahead of the data, while crude oil traded at $49.70 a barrel from $49.80 earlier.