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In her prepared statement for her testimony, Fed Chair Janet Yellen follows the script.  The economy is on track for solid growth in the currency. Yellen sees transitory factors  slowing down the economy (weather). Stimulus is still warranted – something we heard in previous statements. She still sees slack in the US economy but she forecasts faster growth  this year than in 2013.

It seems that markets were awaiting the beginning of the testimony in order to take profits on the recent USD sell off, but the moves are limited.

In relation to inflation, Yellen says that persistent inflation below 2% could pose risks.  The Chair of the  Federal Reserve mentions geo-politics as a potential risk.

Regarding housing, she sees recent data as disappointing, and that flattening in housing is a risk. No bubbles are sees in any asset prices.

EUR/USD is sliding towards the bottom of the  post rally range, to around 1.3915. GBP/USD is hanging on to 1.6960. USD/JPY is ticking higher.

The dollar was hit hard yesterday across the board, with GBP/USD getting very close to 1.70.

These are the prepared statements. She will then face questions from politicians.

Tomorrow we have an event that will probably have a bigger event: the rate decision in the euro-zone. Here is the  ECB Preview: a small step to weaken the euro? 4 scenarios