And now, as of Friday afternoon ET, traders see a 92% chance the Fed hikes by 25 basis points at the March meeting, according to the World Interest Rate Probability data.
The Bank of Canada on Wednesday held steady on interest rates, citing uncertainties about the domestic economy.
Earlier this week, several high-ranking US Federal Reserve officials hinted that a rate increase was on the cards for March, prompting markets to price in the likely outcome.
Yields on USA 10-year Treasuries, which move inversely to price, were 0.9 basis points higher on Friday in Asia at 2.4869.
Yellen's remarks follow hawkish comments in recent days from a slew of Fed speakers and cement a likely rate hike at the Fed's next meeting on March 15.
In 1.12pm trading in NY, the Dow Jones Industrial Average climbed 1.5 percent, while the Nasdaq Composite Index gained 1.2 percent. Not all analysts agree with the Fed's bullish sentiments, citing doubts about the detail of the Trump administration's growth plans and excessive market optimism around fiscal stimulus.
"The markets are trading higher on the softer approach by the President", Peter Cardillo, chief market economist at First Standard Financial wrote in a note.
French politics continued to plague the euro, but the prospect of the U.S. Fed raising rates while the European Central Bank is maintaining a highly accommodative monetary policy for an indefinite time period encouraged forex players to continue selling the euro on strength.
The Dow Jones Industrial Average closed virtually unchanged at 21,005.71.
United States consumer spending cooled in January as demand for automobiles and utilities fell, but inflation recorded its biggest monthly increase in four years.
The primary reason for EUR/USD's fall on Tuesday night and Wednesday was the increased strength of the US Dollar.
The premium investors demand for holding French bonds over German ones hit a one-month low after right-wing French presidential candidate Francois Fillon, whose campaign has been dogged by an investigation into alleged misuse of taxpayers' money, vowed to stay in the race.
Japan led Asian stock markets higher, with the Nikkei up 1.4%. Since theNov. 8 election, the S&P 500 has risen 11 percent.
'Two months into 2017 and despite a slowing in the rate of growth in February, manufacturers continue to register strong levels of output, healthy order books and growing trade courtesy of a weak sterling, ' noted Mike Rigby, head of manufacturing at Barclays.
Investors are betting Trump will bring forward major tax cuts, slash regulations and boost spending to fix America's roads and bridges.
Services activity in the USA strengthened in February, according to the Institute for Supply Management.
Nervousness about what details, if any, will be forthcoming have weighed on USA markets, with Wall Street posting losses on Tuesday. Most measures of job creation also point to a firming labor market.