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 The dollar was little changed against a basket of major currencies,
trading at 96.64 before Yellen's congressional testimony, which
might offer more hints about the timing of an interest rate hike
after a surprise fall in U.S. retail sales on Tuesday.
Investors will be keen to see to what extent the prolonged
uncertainty over Greece's debt crisis and the slump in Chinese
stocks have affected the Fed's outlook. U.S. stock futures indicated
a marginally higher open on Wall Street.
"The latest developments in Greece and China have wider
ramifications as they could affect the Federal Reserve's decision to
normalize policy," JPMorgan Asset Management global strategist,
Thushka Maharajat, said.
"We maintain our view of a September rate increase, but that view
has become more balanced. It is predicated on Europe ... containing
risks from the Greek crisis."
The Greek parliamentary vote is seen as the major hurdle to a final
agreement for the bailout, which could end -- at least temporarily
-- months of intense uncertainty, volatility and frequent risk
aversion in financial markets.
The pan-European FTSEurofirst 300 index was up 0.2 percent to
1,583.77, having risen for five days in a row. The euro, which
has lost 1.5 percent this week, was up 0.1 percent at $1.1017.
Ten-year yields on Spanish, Italian and Portuguese bonds, seen as
vulnerable to Greek contagion, fell 5-8 basis points to 1.99
percent, 2.03 percent and 2.72 percent respectively.
Bonds were the biggest movers among European assets, the difference
being made by daily European Central Bank buying under its trillion
euro stimulus program. Yields on German Bunds fell 4 basis points to
0.80 percent.
"Investors are betting that despite all the opposition from his own
party, (Greek Prime Minister Alexis) Tsipras will get sufficient
votes to pass the reforms today," said Nick Stamenkovic, a bond
strategist at RIA Capital Markets.
An International Monetary Fund study published on Tuesday showed
that Greece needs far more debt relief than European governments
have been willing to consider.
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CHINA GROWTH
China's second quarter gross domestic product grew an annual 7
percent, flat on the previous quarter and slightly higher than
analyst forecasts. Fixed-asset investment and industrial output
growth also beat economists' forecasts.
But Shanghai's benchmark composite index fell 3 percent, and the
CSI300 index of the largest listed companies in Shanghai and
Shenzhen dropped 3.5 percent.
Further stimulus is expected after the quarter ended with a savage
correction that shaved about 30 percent off stock markets' value
since last month, before Beijing's support stemmed the freefall for
a while.
"Stock investors at present care more about what the government
policy toward the market is, whereas the connection between the
economy and the market has somehow loosened," Haitong Securities'
senior stock analyst, Zhang Qi, said.
Oil prices dipped as the market prepared for a gradual increase in
supply after Iran signed a nuclear deal with six world powers under
which sanctions imposed by the United States, the European Union and
the United Nations are to be lifted in exchange for curbs on
Tehran's nuclear program.
Brent crude was down 41 cents from its previous settlement, trading
at $58.10 a barrel. U.S. futures were down 35 cents at $52.69.
(Additional reporting by Lisa Twaronite in Tokyo and Emelia Sithole
Matarise in London; Editing by Mark Trevelyan)
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