Global stocks gain, dollar dips after 'dovish' Yellen speech
By Saqib Iqbal Ahmed
NEW YORK (Reuters) - Stocks gained on markets worldwide on Monday, while the U.S. dollar edged lower against major currencies after Federal Reserve Chair Janet Yellen said U.S. interest rate hikes are likely on the way, but dropped a reference to the timing of any increase.
Yellen's remarks caused U.S. Treasury yields to pare gains and limited a rally in oil prices, which hit a seven-month high earlier in the session on supply worries.
In the last public comment from any U.S. central banker before the policy meeting next week, the Fed chief said last month's jobs report was "disappointing" and bears watching, though she warned against attaching too much significance to it on its own.
"If incoming data are consistent with labor market conditions strengthening and inflation making progress toward our 2 percent objective, as I expect, further gradual increases in the federal funds rate are likely to be appropriate," Yellen said at the World Affairs Council of Philadelphia.
She was careful, however, not to give a time-frame for raising interest rates, in contrast to a speech on May 27, when she said "probably in coming months such a move would be appropriate."
To some investors, the absence of a time frame suggests the Fed will delay its next rate hike well beyond next week, when U.S. central bankers gather to make monetary policy.
"I think she's still committed to rate hikes, but she is emphasizing there's not a timetable. She didn't say 'in the next few months,' which is dovish," said Bucky Hellwig, senior vice president at BB&T Wealth Management, in Birmingham, Alabama.
The greenback, which suffered its biggest one-day drop against a basket of major currencies .DXY in four months on Friday after a poor payrolls report, fell to its lowest in almost four weeks and was last down 0.05 percent at 93.986. Continued...