Yellen said in prepared remarks to Congress said that waiting too long to raise interest rates would be “unwise”, given the rise in inflation and economic growth.
Rodrigo Catril, a currency strategist at the National Australia Bank, said in a note the remarks “triggered a sell-off in U.S. Treasury yields and a broad dollar rally as she left the door open for a rate hike as soon as the next Federal Open Market Committee meeting in March.”
The dollar climbed against a basket of currencies to trade at 101.22 at 7:09 a.m. HK/SIN on Wednesday, from an earlier session low of 100.70.
Among major currency pairs, the yen weakened slightly against the dollar to trade at 114.33, from an earlier high of 114.19. The euro fetched $1.0575, while the Australian dollar traded at $0.7672.
Some analysts believe the dollar could extend gains as Yellen continues her testimony before Congress on Wednesday.
Elsewhere, the Dow Jones industrial average rose 92.25 points, or 0.45 percent, to end at 20,504.41. The S&P 500 index gained 9.33 points, or 0.40 percent, to close at 2,337.58, while the Nasdaq advanced 18.62 points, or 0.32 percent, to end at 5,782.57.
