On Wednesday the greenback was sharply higher against rivals on upbeat remarks from Federal Reserve Chair Janet Yellen who said the bank is still on track to raising rates at some point this year.
USD/JPY hit 123.92 during early U.S. trade, the pair's highest since June 26.
EUR/USD was last at 1.0953 shedding 0.52%.
In a twice-year testimony before Congress, Federal Reserve Chair Janet Yellen was notably more optimistic compared to her last appearance in February.
“Looking forward, prospects are favorable for further improvement in the U.S. labor market and the economy more broadly.”
Yellen said she expects the U.S. economy to get stronger over the rest of this year and put the central bank on a path to raise interest rates “at some point this year.” However, she has not given any hints on when it will happen and how many times.
Most analysts agree the bank will make its first move at a mid-September meeting.
Yellen spoke of cheaper gasoline prices, stronger consumer confidence and a pickup in consumer spending, and new cars and trucks in particular.
Although hiring has slowed from a torrid pace at the end of 2014, the country is still creating enough jobs to lower the unemployment level over time. In June the jobless rate was 5.3%.
“Other measures of job market health are also trending in the right direction,” but there is “still some slack.”
For the first time, the central bank chief made clear reference to particular events overseas, namely Greece and China, that could “pose some risk” to the U.S. economy.
While the situation in Greece remains tough, “... China continues to grapple with the challenges posed by high debt, weak property markets and volatile financial conditions.”
Nevertheless, Yellen signaled the risk has been small.
“If the economy evolves as we expect, economic conditions likely would make it appropriate at some point this year to raise the federal funds rate target.”
