By Saumya Vaishampayan, MarketWatch
NEW YORK (MarketWatch) — The dollar rose against the yen and New Zealand dollar Wednesday as investors digested comments from Russian President Vladimir Putin suggesting a willingness to talk and looked ahead to testimony from Federal Reserve Chairwoman Janet Yellen.
Putin said Wednesday he’s ready to talk about diffusing the situation in Ukraine with the head of the Organization for Security and Cooperation in Europe, according to Reuters.
Investors will be parsing testimony from the Fed’s Yellen as she speaks before the Joint Economic Committee. She is likely to emphasize that interest rates will remain low.
The dollar USDJPY +0.21% rose to ÂĄ101.92 from ÂĄ101.68 late Tuesday.
Broad-based dollar strength has been absent this year, with the dollar down against most of its major rivals, even as the Federal Reserve continues to slow the pace of its stimulative bond purchases and the U.S. economy recovers. Some analysts point to the Fed’s commitment to keeping interest rates low even after the end of its bond-buying program as the cause of dollar weakness. Higher interest rates should make U.S. assets more attractive. Another culprit is the possible accumulation of U.S. Treasurys by reserve managers, which weighs on yields.
The ICE dollar index DXY +0.03% , which measures the dollar’s strength against six other currencies, moved up to 79.167 from 79.125 late Tuesday. The WSJ Dollar Index XX:BUXX +0.06% , an alternate gauge of dollar strength, rose to 72.52 from 72.45.
The New Zealand dollar NZDUSD -0.76% fell to 86.72 U.S. cents from 87.04 U.S. cents late Tuesday. Reserve Bank of New Zealand Governor Graeme Wheeler said Wednesday the exchange rate was overvalued and unsustainable. Continued strength could play into the number and frequency of future interest-rate hikes and even lead to intervention in the foreign-exchange market, he said.
“New Zealand monetary authorities find themselves in a difficult position as the central bank must battle the housing bubble in the country and thus continue to raise rates, but at the same time maintain the exchange rate competitive,” said Boris Schlossberg, managing director of foreign-exchange strategy for BK Asset Management.
The Australian dollar AUDUSD -0.25% fell to 93.26 U.S. cents from 93.56 U.S. cents late Tuesday.
Data from China showed that the growth in the country’s service sector is slowing, with the HSBC services purchasing managers index falling to 51.4 in April from 51.9 in March.
In other trade, the British pound GBPUSD -0.06% fell to $1.6966 from $1.6978 late Tuesday and the euro EURUSD +0.02% was little-changed at $1.3930 versus $1.3929.
