(Updates prices, adds comments, impact of Thursday's ECB
* Dollar extends gains after Yellen testimony
* Dovish Yellen comments were expected
* Rouble gains on Putin comments
By Sam Forgione
NEW YORK, May 7 The dollar rose broadly on
Wednesday after traders removed short positions against the U.S.
currency on the view that persistently dovish comments from the
Federal Reserve have become less effective in weakening the
Fed Chair Janet Yellen, in testimony before the Joint
Economic Committee of Congress, maintained her dovish stance and
said a high degree of monetary accommodation was warranted given
"considerable" slack in the U.S. labor market and low inflation.
"The dollar has been weaker for weeks, so it was time for it
to have some reprieve," said Axel Merk, president and chief
investment officer of California-based Merk Funds.
The dollar had pared losses against the euro and risen
broadly ahead of Yellen's testimony after investors began
removing short positions on the view that negative sentiment
toward the U.S. currency had largely been priced into the
The dollar also extended its gains on a slight rise in
long-term Treasuries yields after the release of Yellen's
testimony at 10 a.m. (1400 GMT). Prices of 30-year Treasury
bonds were last down 13/32 to yield 3.4 percent,
from a yield of 3.38 percent late on Tuesday.
The euro was last down 0.09 percent against the
dollar at $1.3915. The dollar was last up 0.15 percent against
the Japanese yen at 101.825, and was up 0.2 percent
against the Swiss franc at 0.876 francs.
The euro also traded lower against the dollar on hesitation
ahead of the European Central Bank's policy meeting on Thursday.
"People are reluctant to take big positions ahead of time,"
According to the median in a Reuters poll of over 60 foreign
exchange strategists taken in the past week, the euro, trading
around $1.39 earlier on Wednesday, would need to climb another 2
percent to trigger any policy action.
The U.S. dollar index, which measures the dollar
against a basket of six major currencies, was last up 0.15
percent at 79.215.
The dollar fell 1.36 percent against the rouble to
trade at 34.92 roubles on reduced geopolitical risk surrounding
Russia and Ukraine.
The Russian currency extended its gains against the dollar
after Russian President Vladimir Putin called on separatists in
eastern Ukraine to postpone a referendum on independence for the
mostly Russian-speaking region. Putin also said Moscow had
withdrawn troops from the border with Ukraine. [ID: nL6N0NT52F]
"There has been a relaxation of tensions in Ukraine," said
Lane Newman, director of foreign exchange at ING Capital Markets
in New York.
(Reporting by Sam Forgione; Additional reporting by Patrick
Graham in London; Editing by Dan Grebler and Chizu Nomiyama)