When is Yellen’s speech and how could affect DXY?

Janet Yellen is schedule to speak at 18:00 GMT on the Economic Outlook at the Executives Club of Chicago. It will be the last public remarks before the next meeting of the FOMC. 

Key notes

The latest round of US economic data and several statements from FOMC officials boosted expectations of a rate hike from the Federal Reserve at the next meeting, that will take place March 14 - 15. 

According to the CME Group FedWatch tool, taking into account Fed Futures, the odds of a rate hike at the next meeting are round 77% and the probability of another rate hike in June surged to 40% during the current week. 

“If Yellen wants to push against expectations for a hike on March 15, today may be their last opportunity. This seems unlikely given the recent comments by Dudley, but also Governors Brainard and Powell. There appears to have been a relatively sudden change in the official rhetoric, and it has been seemingly without exception”, said analysts from Brown Brothers Harriman. 

US: Yellen's speech in Chicago is awaited - BBH

Implications for DXY

If Yellen reinforces the case for many rate hikes during 2017 the US dollar could rise across the board pushing the Dollar Index (DXY) to the upside. Currently the DXY is struggling tho hold above 102.00, but still remains above the key 101.70 support. To the upside, if the index breaks the 102.50 barrier, a test of 103.00 seems likely. 

There are also risks to the other way. During the last days, the market started to discount a rate hike in March more aggressively; so, if Yellen fails to keep the expectations high, the US dollar could suffer a reversal. In the case the DXY drops back below 101.70, the greenback could lose momentum. Below, the key support is seen around 101.00/05, where the 20-day moving average stands.

About Janet Yellen 

Janet L. Yellen took office as Chair of the Board of Governors of the Federal Reserve System on February 3, 2014, for a four-year term ending February 3, 2018. Dr. Yellen also serves as Chairman of the Federal Open Market Committee, the System's principal monetary policymaking body.