Dollar Falls After Comments From Janet Yellen

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The European Central Bank's ultra-easy monetary policy is working and the eurozone's economic recovery has taken hold even if more time is needed to lift inflation to the bank's 2 per cent target, ECB President Mario Draghi said on Friday.

Yellen's speech, delivered here to an annual gathering of central bankers, finance ministers, and economists, comes as Trump considers whether to reappoint her to a four-year term as head of the USA central bank.

Yellen said: "The evidence shows that reforms since the crisis have made the financial system substantially safer".

"So far, the market expects no surprise from the meeting, but investors want to stay on the sidelines until they see how overseas markets move later in the day after the event", said Yutaka Miura, a senior technical analyst at Mizuho Securities.

Ms Yellen is still in the running to be reappointed by Mr Trump to a new term.

Interest-rate sensitive sectors such as telecommunications .SPLRCL , up 0.8 percent, and utilities .SPLRCU , up 0.3 percent, rose as Yellen's speech did not comment on the path of interest rate hikes for the central bank, which sent U.S. Treasury yields lower.

Yellen said that overall, the regulatory change put banks, and the economy, back on their feet.

Speaking during a question-and-answer session following a speech at the U.S. Federal Reserve's annual conference in Jackson Hole, Wyoming, Draghi said he was confident inflation would converge with the ECB's target of nearly 2 percent as output rises towards capacity.

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"Already, for some, memories of this experience may be fading - memories of just how costly the financial crisis was", she said.

Treasury Secretary Steven Mnuchin said the US debt ceiling, a hurdle to be crossed before any tax reform can take place, will be raised in September and that after talks with congressional leaders from both parties everyone is "on the same page".

"I think she's very political and to a certain extent, she should be ashamed of herself", Trump said of Yellen during a CNBC interview in September 2016.

Last month, Trump said Cohn, a former executive at investment bank Goldman Sachs Group Inc., was under consideration along with Yellen. The Fed chair has given the president plenty to think about.

The president is also considering his National Economic Council Director Gary Cohn for the top Fed role.

"Citizens standing up for equality and freedom can never be equated with white supremacists, neo-Nazis, and the KKK", Cohn told The Financial Times.

Cohn, who is Jewish, stood by Trump's side during an impromptu news conference in NY last week in which the president said there "some very fine people" marching alongside neo-Nazis in Charlottesville.

"Renegotiating NAFTA and protectionist measures against China will not save jobs", University of Pennsylvania professor Ann Harrison said, arguing that the decline in manufacturing jobs was due to labour-saving management and technologies.

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