Dollar Adds To Bernanke-Backed Gains
The U.S. dollar climbed further against its major rivals Thursday, tacking on additional gains after the first day of congressional testimony from Federal Reserve Chairman Ben Bernanke.
The ICE dollar index , which measures the greenback against six other major currencies, rose to 82.853 from 82.715 late Wednesday in North America.
Likewise, the WSJ Dollar Index , which uses a slightly larger comparison basket, was at 74.93, up from 74.72.
While analysts differed over whether Bernanke’s comments were more dovish or hawkish than his remarks last week, the forex market appeared to focus on the eventual slowing of Fed stimulus, sending the dollar higher in Wednesday trade.
Bernanke was due to appear before the Senate later Thursday.
Similarly, word of “modest to moderate” growth for the U.S. economy in the Federal Reserve’s “Beige Book” report also helped support the dollar.
The U.S. unit’s gains were spread broadly against the other majors, with the euro slipping to $1.3095 from late Wednesday’s $1.3107, and the British pound easing to $1.5178 from $1.5212.
Despite the mild loss for the pound, Crédit Agricole wrote early Thursday that sterling “looks well supported in the days ahead” after minutes from the Bank of England meeting earlier this month showed the policy makers voting unanimously to keep the bank’s interest rates and asset purchases unchanged.
In June, 3 of the 9 policy-committee members had voted to add stimulus, and Crédit Agricole analysts described the 9-0 decision in the July meeting as “a hawkish surprise.”
They said that U.K. retail sales due out later in the day “may be a risk, given our below consensus expectation, but any set back to [the pound] is likely to prove temporary.”
Among the Asian currencies, the Japanese yen lost more ground, with the dollar advancing to ¥99.96 from ¥99.56, while the Australian dollar retreated to 91.69 U.S. cents from 92.32 cents late Wednesday.
CMC Markets premium client manager William Leys said that, Bernanke aside, the Aussie-U.S. currency pair had seen “a lack of recent impetus” to drive a major move.
“But that may change tonight, with the data on jobless claims due out of the U.S. A positive read will likely strengthen the [U.S. dollar], at the Aussie’s expense. Alternatively, a weak read could see the [Australian dollar] push toward 93 cents,” he wrote Thursday.
The jobless claims data were slated for release at 8:30 a.m. U.S. Eastern time, with the June index of leading indicators and a manufacturing report from the Philadelphia Federal Reserve both due out at 10 a.m.
Source : Marketwatch
