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Dollar regains luster as Yellen seen less dovish than usual

The dollar rose to its highest in more than 11 months against a basket of currencies on Friday after Federal Reserve Chair Janet Yellen came out more balanced than expected on her views about the U.S. economy and monetary policy in remarks to central bankers.

The speech by Yellen, a policy 'dove', to an annual gathering of central bankers in Jackson Hole, Wyoming, cited persistent labor market slack but noted faster recovery in the sector could accelerate the timing of a Fed interest rate hike.

The greenback climbed to an 11-month high against the euro and a more than four-month peak above 104 yen following Yellen's speech.

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Yellen acknowledged slack in the U.S. jobs market as she called for a "pragmatic" approach to monetary policy to allow officials room to evaluate data without committing to a pre-determined rate path.

But at the same time, she said that if the labor market recovered more quickly than anticipated, the Fed may have to raise rates sooner and faster than expected.

Higher interest rates tend to boost the allure of the dollar as they raise the yield on some U.S. assets.

The dollar index rose above 82, its highest since September 2013. The greenback was last up roughly 0.1 percent at just below 104.

The euro, meanwhile, stayed weak against the dollar after European Central Bank President Mario Draghi told the Jackson Hole gathering that the bank is ready to adjust monetary policy further to alleviate a sluggish euro zone economy.

The euro zone common currency last traded above $1.32, down 0.3 percent.

—By Reuters

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