Dollar slips as markets await Yellen's speech

She may send a clear signal that the Fed is gearing up for an increase this year. Many analysts expect, though, that if she speaks about monetary policy, she will take a more equivocal line: that it is data-dependent, and a rate hike this year is just a possibility. Futures markets are pricing in only about a 20 percent chance that rates will rise in September and the likelihood of around 50 percent of at least one increase by the end of the year, according to CME FedWatch. Any clear signal of a 2016 hike could therefore send the greenback surging. Friday's data on the second estimate of U.S. gross domestic product showed that growth in the second quarter for the world's largest economy was slightly lower than previously thought. U.S. GDP expanded at a 1.1 percent annual rate, the Commerce Department said on Friday. That was down slightly from the 1.2 percent rate reported last month. There were positive elements in the report though, said currency strategist Vassili Serebriakov of Credit Agricole in New York. Serebriakov cited the upward revisions in consumer spending and an improvement in business investment figures from the preliminary estimate. "But the dollar is obviously weakening, and that's just due to position adjustment ahead of Yellen," Serebriakov said. The dollar index .DXY, which measures the currency against a basket of six major counterparts, edged down 0.2 percent to 94.626, roughly where it started the week. "If (Yellen) does speak about monetary policy, she'll try to keep a hike this year on the table," said HSBC currency strategist Dominic Bunning in London. "But I don't think she'll be particularly hawkish; our view is that they (the Fed) don't hike this year." The dollar slipped 0.2 percent against the yen to 100.33 yen JPY=. Japanese data released early on Friday added to evidence that the Bank of Japan has reason to increase its stimulus next month as the economy slips back toward deflation. –Reuters