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Forex pairs in this Article » EUR/USD
FXStreet (London) - Markets have seen some life return after a flat start, with the dollar creeping upwards on expectations that Federal Reserve chair Janet Yellen will confirm the central bank's intention to continue to taper its quantitative easing programme, despite recent poor US data.

Yellen expected to confirm tapering schedule

Yellen is set to testify before the Senate Banking Commission tomorrow where it is expected that she will maintain the stance that the Fed will continue to taper it's monthly asset purchases at its current rate of USD10bn a month unless there is a serious deterioration in US economic data.

While we have seen a run of below-par data from the US, particularly at the consumer level, much of this poor performance has been attributed to below-normal temperatures and disruptive US weather conditions.

Any confirmation from Yellen that the Fed will continue with its tapering will support the dollar, and lessen the effects of a continuation of recent weak data.

China fixing yuan lower

At the same time as looking for direction from the Fed, markets are also eyeing Beijing. Policy makers cut the CNY fixing rate further overnight, down another 0.01 percent to CNY61192. The latest cut from the People's Bank of China brings the fixing to the lowest level since 20 December and comes as the PBoC moves to counter hot money flows and prepares to widen its trading bands.

ECB running out of options

Earlier today, Austrian National Bank president and European Central Bank governing council member Ewald Notwotny played down the possibility of negative deposit rates from the ECB to try and free up Eurozone lending conditions. With little data or announcements coming from Europe, Fed expectations dominate the EUR/USD trade.

EUR/USD is currently trading at USD1.3670, down 0.55 percent.
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