Dollar gains in New York on Treasury Secretary Yellen's comments

The greenback ended the day higher against majority of its peers on Tuesday due to a rebound in U.S. Treasury yields together with comments from U.S. Treasury Secretary Janet Yellen, who said U.S. interest rates may need to rise.  
  
Reuters reported U.S. interest rates may need to rise to prevent the economy from overheating as more of U.S. President Joe Biden's economic investment programs come on line, U.S. Treasury Secretary Janet Yellen suggested in remarks released Tuesday.       
"It may be that interest rates will have to rise somewhat to make sure that our economy doesn't overheat, even though the additional spending is relatively small relative to the size of the economy," she said in taped remarks to a virtual event put on by The Atlantic. "It could cause some very modest increases in interest rates to get that reallocation, but these are investments our economy needs to be competitive and to be productive (and) I think that our economy will grow faster because of them."  
  
Versus the Japanese yen, the dollar initially rose from 109.04 in Australia to session highs of 109.48 in early European morning. The pair then pared intra-day gains and retreated to 109.05 in New York morning on fall in U.S. Treasury yields as well as cross-buying in jpy before staging a rebound to 109.42 on Yellen's comment.   
  
The single currency met renewed selling at 1.2065 in Australia and tumbled to an 11-day low of 1.2000 in Europe on broad-based usd's strength. The pair then staged a rebound to 1.2035 in New York but only to weaken again to 1.2003 on Yellen's comments.  
  
The British pound initially fell from 1.3914 to 1.3852 in early European morning before rebounding to 1.3891. The pair then dropped to session lows of 1.3839 at New York open on usd's strength as well as crossing-selling in sterling due to comments from Scotland's First Minister, Nicola Sturgeon before rebounding to 1.3891. However, price then staged a strong recovery to 1.3897 on cross-buying in sterling.  
  
Reuters reported Scottish First Minister Nicola Sturgeon challenged British Prime Minister Boris Johnson to oppose plans for another independence referendum in court, saying that only the courts could prevent another such vote.     "I'm saying if Boris Johnson wants to stop it, he would have to take legal action," Sturgeon told Sky.     "If Boris Johnson didn't do that, by definition it would be a legal referendum. If he did do that, the courts would decide," Sturgeon said.   
  
Data to be released on Wednesday :  
  
Australia AIG construction index, services PMI, building permits, New Zealand unemployment rate, employment change, labour cost, Swiss CPI, Italy markit services PMI, France markit services PMI, Germany markit services PMI, EU markit services PMI, producer prices, U.S. MBA mortgage app, ADP employment change, markit services PMI, ISM non-manufacturing PMI.