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Dollar Drops Ahead of Bernanke’s Testimony

July 17, 2013 at 0:14 by Vladimir Vyun

The all-seeing eye on top of pyramid on one-dollar billThe US dollar dropped today ahead of this week’s testimony of Federal Reserve Chairman Ben Bernanke. Traders yet again speculate about a reduction of quantitative easing, but they are less certain that such reduction will happen soon and this drove the greenback lower.

Bernanke’s speech to the Congress is the major event this week and everybody’s attention is focused on it. The Chairman will start the testimony tomorrow and will conclude it on the next day. Previous Bernanke’s comments had a great impact on the Forex market and the Chairman may shock the market yet again.

The Fed is among rare central banks that are speaking about tightening monetary policy, not loosening it, but it is not unique in this regard. The Reserve Bank of India performed a huge rate hike by as much as 2 percentage points yesterday to support the weakening rupee that suffered in part because of talks about stimulus reduction by the US central bank.

EUR/USD jumped from 1.3059 to 1.3146 as of 23:50 GMT today. GBP/USD advanced from 1.5096 to 1.5126 and USD/JPY slipped from 99.83 to 99.15.

If you have any questions, comments, or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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