U.S. Dollar Extends Rise After Fed's Yellen Signals Rate Hike

The U.S. dollar strengthened against most major currencies in the Asian session on Monday, in the wake of Fed Chair Janet Yellen's comments on growth and the interest rate outlook.

Speaking at Harvard University in Cambridge, Massachusetts on Friday Fed Chair Janet Yellen said that a rate hike "in the coming months" would be appropriate, if the U.S. economy continues to improve.

"I think for the Fed to gradually and cautiously increase our overnight interest over time and probably in the coming months, such a move would be appropriate," she said.

She expects inflation to move back up to 2% objective as crude oil prices have steadied near $50 after plunging to $26 earlier in the year.

Last Friday, the U.S. dollar rose 0.75 percent against the euro, 0.37 percent against the pound, 0.21 percent against the Swiss franc and 0.19 percent against the yen.

In the Asian trading, the U.S. dollar rose to a 2-1/2-month high of 1.1098 against the euro, nearly a 3-month high of 0.9951 against the Swiss franc and more than 1-month high of 111.15 against the yen, from last week's closing quotes of 1.1109, 0.9938 and 110.19, respectively. If the greenback extends its uptrend, it is likely to find resistance around 1.09 against the euro, 1.02 against the franc and 113.00 against the yen.

Against the Australian, the New Zealand and the Canadian dollars, the greenback advanced to a 6-day high of 0.7149, more than a 2-month high of 0.6675 and a 5-day high of 1.3092 from Friday's closing quotes of 0.7179, 0.6703 and 1.3023, respectively. The greenback may test resistance near 0.70 against the aussie, 0.65 against the kiwi and 1.34 against the loonie.

Meanwhile, the U.S. dollar fell to 1.4631 against the pound, from an early 6-day high of 1.4599 and held steady thereafter.

Looking ahead, Swiss KOF leading indicator for May and Eurozone business climate index for May are due to be released later in the day.

In the New York session, the German flash CPI data for May, Canada industrial products and raw materials price indexes for April are slated for release.

U.S. markets will remain closed today for Memorial Day holiday, while the U.K. markets are also closed for Spring Bank public holiday.