Dollar gains after Yellen revives rate hike expectations

Thu Sep 24, 2015 7:43pm EDT
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By Hideyuki Sano

TOKYO (Reuters) - The dollar jumped and U.S. interest rate futures price briefly dropped after Federal Reserve Chair Janet Yellen suggested the central bank is still on track to raise interest rates later this year.

The euro fell about 0.5 percent to $1.1174 from around $1.1230 while the dollar rose to around 120.27 yen from around 120.00 yen before Yellen's speech.

Federal fund futures contracts for January fell to as low as 99.735 in price, pricing in more than 50 percent chance of a rate hike by the end of this year, before erasing losses.

Yellen, speaking a week after the Fed delayed a long-anticipated rate hike, said she and other Fed policymakers do not expect recent global economic and financial market developments to significantly affect the central bank's policy.

The Fed chair struggled to finish a speech at the University of Massachusetts at Amherst due to dehydration and

received medical attention.

She later attended a dinner event as planned, a university spokesman said.   Continued...

Market prices are reflected in a glass window at the Tokyo Stock Exchange (TSE) in Tokyo August 24, 2015.  REUTERS/Toru Hanai