U.S. Dollar Higher Following Yellen's Remarks On Rate Hike

The U.S. dollar strengthened against its major counterparts in the European session on Wednesday in the wake of comments from U.S. Treasury Secretary Janet Yellen suggesting a rate hike in the near future to prevent the economy from overheating.

The interest rates may need to rise to prevent the economy from growing too rapidly as well as to contain inflation, Yellen said during an economic seminar presented by the Atlantic.

"Even though the additional spending is relatively small relative to the size of the economy, it could cause some very modest increases in interest rates."

"But these are investments our economy needs to be competitive and to be productive. I think our economy will grow faster because of them," Yellen added.

Investors await April's ADP private payrolls data due at 8:15 am ET, which serves as a precursor to Friday's nonfarm payrolls data.

U.S. treasury yields rose, with the benchmark yield on 10-year note touching 1.605 percent. Yields move inversely to bond prices.

The greenback appreciated to more than a 2-week high of 1.1986 against the euro, while touching 0.9165 against the franc, its highest level since April 28. If the greenback rises further, 1.18 and 0.93 are possibly seen as its next resistance levels against the euro and the franc, respectively.

The greenback recovered to 109.48 against the yen and 1.3882 against the pound, from its early low of 109.20 and a 2-day low of 1.3915, respectively. The greenback is likely to find resistance around 112 against the yen and 1.34 against the pound.

The U.S. currency bounced off to 0.7704 against the aussie and 0.7149 against the kiwi, from its prior lows of 0.7738 and 0.7177, respectively. The next possible resistance for the greenback is seen around 0.75 against the aussie and 0.70 against the kiwi.

The greenback, though, dropped to 1.2278 against the loonie, after rising to 1.2311 at 5 pm ET. The greenback is seen finding support around the 1.21 area.

U.S. ADP private payrolls data for April is scheduled for release at 8:15 am ET.

U.S. ISM services PMI for April will be released in the New York session.