By: Barbara Zigah
The U.S. Dollar came under pressure again as Ben Bernanke, the head of the U.S. Federal Reserve Bank, signaled that monetary policy would continue to remain accommodative, giving rise to renewed hopes of more easing. The U.S. Dollar Index, which measures the greenback’s value versus a weighted basket of currencies, slipped to 78.870 .DXY in the overnight hours before recovering slightly to 78.954. The Euro benefitted from those comments, along with improved business sentiment in Germany, and traded at a 1-month high yesterday on the EBS trading platform. Currently, the EUR/USD pair is trading at $1.3348, down 0.1% from the $1.3368 peak struck yesterday; resistance is seen near $1.3373.
One trader in Japan said that the outcome of the next U.S. Treasuries auction would be critical to the Dollar’s direction; if Treasuries’ buying gains momentum, resulting in a fall in bond yields, the U.S. Dollar could weaken further especially against commodity-linked currencies.
Mr. Bernanke commented that the employment situation, though improved over the last several months, was the reason that the central bank intended to hold onto its dovish stanch, which includes ultra low interest rates for an extended period. His argued was that the improvement in the unemployment situation was not structural but rather cyclical, suggesting that it could turn around at any time.
U.S. Dollar Softens on Bernanke Comments
After working on Wall Street, Barb began her second career as a freelance writer at Daily Forex, where the CEO recognized fresh, untapped potential and was willing to give her a try. She’s never looked back. Since then, she’s worked steadily as a freelance writer and editor in the financial services and Forex-related industry.