Asia markets on Wednesday are likely to focus on Federal Reserve Chair Janet Yellen’s overnight speech as North Korea tensions take a backseat.
Fed Chair Janet Yellen’s speech on Tuesday was regarded as slightly hawkish by market watchers after she said the central bank had to continue raising interest rates gradually in the face of “significant uncertainties.”
However, Yellen also acknowledged that the Fed may have “misjudged” the strength in the labor market and inflation, suggesting the central bank could be more dovish in removing policy accommodation than previously expected.
The greenback touched a one-month high following Yellen’s comments, although it later gave up some gains. The dollar index, which tracks the greenback against a basket of rival currencies, stood at 93.004 at 6:35 a.m. HK/SIN after reaching as high as 93.286 earlier. That compared with levels under 92 last week.
The dollar also clawed back gains against the Japanese currency to fetch 112.24 yen. The U.S. currency had traded around the 111 handle in the last session after North Korea accused President Donald Trump of declaring war.
In news related to the hermit state, the U.S. Treasury Department on Tuesday put sanctions on North Korean-linked banks and persons. The sanctions aimed to curb financial support for the North’s weapons program.
The order for Chinese lenders to stop doing business with Pyongyang “is a logical next step in the sanctions, and a very important one,” he continued in an interview with CNBC.
“Chinese commercial banks had been a big route for facilitation of trade to North Korea so the fact that the PBOC has put out a taboo, that’s a very big deal,” Ross said, referring to China’s central bank, or the People’s Bank of China.
Ahead, markets awaited headlines on U.S. tax reform, which is expected to be unveiled on Wednesday U.S. time.