Investing.com - The dollar was trading close to two-week lows against the euro on Tuesday and remained slightly higher against the yen after Federal Reserve Chair Janet Yellen confirmed that the U.S. central bank is on track to reduce its stimulus program.
USD/JPY eased up 0.11% to 102.37, off session lows of 102.08.
In prepared remarks to the House Financial Services Committee, Fed Chair Yellen said that the central bank would taper the pace of its asset purchases at future meetings if the economy continued to improve as expected.
“Let me emphasize that I expect a great deal of continuity in the Federal Open Market Committee’s approach to monetary policy,” she said.
She added that the pace of the central bank’s bond purchases are not on a “preset course”, while reiterating that Fed plans to hold interest rates at zero “well past” the time the jobless rate falls below 6.5%.
Ms. Yellen said that "the recovery in the labor market is far from complete," despite progress made in the last year, with the unemployment rate, currently at 6.6%, still "well above levels" that Fed officials consider sustainable by a healthy economy.
EUR/USD hit 1.3683, the highest since January 29 and was last up 0.18% to 1.3669.
The pound rose to session highs against the dollar, with GBP/USD up 0.44% to 1.6471.
The dollar slipped against the Swiss franc, with USD/CHF down 0.21% to 0.8948.
Elsewhere, the Australian dollar was trading close to one-month highs, with AUD/USD advancing 0.85% to 0.9026. The Aussie strengthened after a report showed that the National Australia Bank’s business conditions index rose for the first time in four months in January, while its business confidence index also improved.
A separate report showed that house prices rose in the fourth quarter. The upbeat data reinforced the view that the Reserve Bank will hold back from further rate cuts for now.
The New Zealand dollar was also higher, with NZD/USD climbing 0.68% to 0.8298.
The Canadian dollar edged higher against the U.S. dollar, with USD/CAD slipping 0.14% to 1.1040.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.22% to a two-week low of 80.53.