The U.S. dollar rose from a two-week high due to high sell-off in shares and followed lower risk appetite. The significant factor that contributed towards the aggregating sell off was U.S. Treasure Secretary Janet Yellen making a statement about potential increase in interest rates, “It may be that interest rates will have to rise somewhat to make sure that our economy doesn’t overheat, even though the additional spending is relatively small relative to the size of the economy,” she said in taped remarks to a virtual event put on by The Atlantic.
“It could cause some very modest increases in interest rates to get that reallocation, but these are investments our economy needs to be competitive and to be productive (and) I think that our economy will grow faster because of them,” she further added.
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Temptus Inc. commented that there’s no certainty how the dollar would behave in the market rest of the year. Many traders believe the U.S. dollar would now climb up more as yields on the bonds of the treasury would increase due to higher interest rates and also expected increase in inflation. However, others are still firm on the claim that the dollar wouldn’t remain stable and keep on dwindling as now it has been remarkably overvalued.