In her testimony to the U.S. Senate Banking Committee, Federal Reserve Chair Janet Yellen aknowledged unusually harsh winter weather appears to be behind recent signs of weakness in the U.S. economy, suggesting the central bank was poised to press forward in ratcheting back its stimulus.
The Fed trimmed its monthly bond purchases by $10 billion at each of its previous two meetings. Its next meeting is scheduled for March 19."The next Fed meeting is really the key because by then some of the economic data should have unambiguously not been weather affected and if that still shows a slowdown the Fed might have to change their policy again, which doesn't necessarily mean an end of tapering but may mean some other loosening," Turner said.
European shares dipped and the dollar fell 0.6 percent versus a basket of main currencies, mostly due to euro strength after euro zone inflation data came in above expectations, easing pressure on the European Central Bank to loosen monetary policy next week.