Yellen comments boost dollar, stocks fall
By Chuck Mikolajczak
NEW YORK (Reuters) - The dollar strengthened on Wednesday and stocks fell on Wall Street, as Federal Reserve Chair Janet Yellen signaled a readiness to hike interest rates and U.S. data indicated a solid labor market.
Yellen said she was "looking forward" to a U.S. rate hike that will be seen as a testament to the economy's recovery from recession, although she did not indicate if she still expected a hike would be warranted at the Fed's last policy meeting of the year on Dec. 15-16.
"I was a little surprised she sounded as hawkish as she did given we're two days away from the nonfarm payrolls report and a couple of weeks away from the Fed FOMC meeting," said Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.
"She gave the impression the Fed is still looking to make a move here in December even despite yesterday's weak ISM numbers."
Yellen also is due to testify on the economic outlook before a joint Congressional committee on Thursday.
U.S. private employers boosted hiring in November. The ADP National Employment Report showed private payrolls increased 217,000 last month while a separate report showed nonfarm productivity grew at a faster pace than previously thought in the third quarter.
The Fed said in its Beige Book report of anecdotal information on business activity collected from contacts nationwide that the U.S. labor market tightened modestly in recent weeks, with some upward pressure on wages.
The U.S. dollar index .DXY extended gains after Yellen's remarks to a high of 100.51, its highest since March 2003, before paring gains. It was last up 0.21 percent at 100.00. Continued...