21.06.201614:22:00UTC+00Dollar Rising After Yellen Testifies Before Congress

The dollar is gaining ground against all of its major rivals Tuesday afternoon, after Federal Reserve Chair Janet Yellen gave her first day of testimony before Congress. Yellen stated this morning that she still expects 'gradual' rate hikes as global headwinds die down.

A "cautious approach" on interest rates "remains appropriate" amid "considerable uncertainty" about the economic outlook, Yellen said in semi-annual testimony before the Senate Banking Committee.

Yellen said Thursday's Brexit vote in the U.K. could have "significant economic repercussions" if the British decide to leave the European Union.

Earlier in the day, the Federal Reserve gave its assessment of risks associated with the Brexit:

"Even given moderate financial vulnerabilities, a number of possible external shocks, including if the United Kingdom chooses to leave the European Union in a pending referendum, could pose risks to financial stability."

European Central Bank President Mario Draghi hinted that risks emanating from a potential Brexit is challenging and the bank has taken necessary measures to overcome the impact of a possible "Brexit" on EU referendum.

Speaking to the European Parliamentary committee in Brussels, Draghi noted that the bloc's uncertainty remained high and downside risks were challenging due to the continued fragile state of the global economy and geopolitical developments.

"We will closely monitor the evolution of the outlook for price stability," he said.

"We stand ready to act by using all the instruments available within our mandate, if necessary, to achieve our objective. In particular, the ECB is ready for all contingencies following the UK's EU referendum," he added.

The dollar has climbed to around $1.1260 against the Euro Tuesday afternoon, from an early low of $1.1349.

Germany's economic confidence strengthened sharply to a 10-month high in June, weathering the risks of a possible 'Brexit', survey results from the Centre for European Economic Research or ZEW, showed Tuesday.

The economic sentiment index rose to 19.2 from 6.4 in the previous month, while it was forecast to fall to 4.8 points. This was the highest reading since last August, when the score was 25.0.

A poll conducted by ORB for the Daily Telegraph found that 53 percent of voters support remaining in the EU compared to 46 percent that prefer to leave.

However, a separate poll conducted by YouGov poll for the Times showed voters split 44 percent to 42 percent in favor of leaving, with a significant 9 percent undecided.

The buck has rebounded to around $1.4685 against the pound sterling Tuesday afternoon, from a 5-month low of $1.4784 this morning.

The U.K. budget deficit narrowed in May, data published by the Office for National Statistics showed Tuesday. Public sector net borrowing decreased by GBP 0.4 billion from last year to GBP 9.7 billion in May. Nonetheless, it was above the expected level of GBP 9.4 billion.

British manufacturers' total order book strengthened slightly in June, the Industrial Trends survey from the Confederation of British Industry showed Tuesday. The total order balance rose unexpectedly to -2 in June from -8 in May. It was forecast to fall to -10.

The greenback has risen to around Y104.800 against the Japanese Yen this afternoon, from yesterday's low of Y103.580.

Japan's all industry activity expanded at a faster pace in April, the Ministry of Economy, Trade and Industry showed Tuesday. The indices of all industry activity advanced 1.3 percent on a monthly basis in April, faster than the 0.2 percent increase seen in March and a 1.2 percent rise forecast by economists.