* New Fed chief with dovish history to testify in Congress
* Markets will trade tightly until Yellen speaks-strategist
By Richard Leong and Michael Connor
NEW YORK, Feb 10 The dollar traded tightly and
held steady against major currencies on Monday as traders
awaited the latest economic and policy views from the new head
of the Federal Reserve.
Janet Yellen, who last week took over from Ben Bernanke at
the helm of the Fed, is viewed as an architect of the U.S.
central bank's current ultra-loose policy and makes her first
appearances as the Fed chair before Congress on Tuesday and
"We won't get much until Miss Yellen has her say," said
Joseph Trevisani, chief market strategist at WorldWideMarkets
Online Trading in Woodcliff Lake, New Jersey. "She has the
potential to rile things up. I don't think she will but she
The dollar index last traded down 0.02 percent at
80.671 after touching its lowest in about one and a half weeks.
The greenback was mildly weaker versus the yen at 102.22 yen
, down 0.15 percent on the day after reaching a low for
the day of 101.99. This followed Friday's choppy session when
the dollar managed a 0.2 percent gain against the safe-haven
The euro traded tightly against the dollar and was up
0.06 percent at $1.3643, and was off 0.115 percent against the
yen at 139.45 yen.
While analysts anticipate U.S. lawmakers will question
Yellen, the first female head of the Fed, on monetary policy,
bank regulations and other potentially market-moving topics,
they reckon she will stick to replies that would not alter
expectations the Fed will hold short-term rates near zero for an
extended period to support the economy.
Nor do analysts foresee she would say anything that would
upset expectations the Fed will back away from tapering its
massive bond-purchase stimulus even after news U.S. employers
added only 113,000 workers last month, far fewer than the
185,000 increase forecast by analysts.
The Fed has reduced its third round of quantitative easing
twice, to $65 billion in February. Wall Street widely expects
policy-makers to taper by another $10 billion a month at their
"The market is not indicating it's expecting any policy
changes. I'm not sure we're going to get anything new," said Bob
Lynch, head of G10 FX trading at HSBC Bank USA in New York.
Latin American currencies weakened on Monday as traders
corrected an overdone rally but volumes were light ahead of
Yellen's testimony as the Federal Reserve's new chair.
Brazil's real ended a four-day advance against the
dollar, losing 1.13 percent and erasing the previous two
sessions' gains. The Chilean and Mexican pesos
also weakened modestly.