By: Barbara Zigah

With investor focus returning to the Eurozone and the results of bank stress tests which will be released later today, the U.S. Dollar steadied in Asian trading today. The greenback had been under additional pressure yesterday, brought lower by Ben Bernanke’s continued testimony to the U.S. Congress and the warnings by Moody’s and S&P that U.S. debt is under review with a strong possibility of a downgrade.

At the heart of the issue is the government’s failure to address the raising of the U.S. debt ceiling, necessary to avoid default. An August 2nd deadline had been imposed, but President Barack Obama has told lawmakers that he wants a deal hammered out within the next 36 hours. Markets appear hopeful that the credit ratings threat will be the impetus that the government needs to work through this critical deal. One forex strategist in Tokyo pointed out that while the downgrade threat doesn’t help the U.S. Dollar, that the situation isn’t grave.”

As reported at 2:11 p.m. (JST) in Tokyo, the Euro was trading against the U.S. Dollar at $1.4168, edging up from $1.4115, the overnight low. The EUR/USD pair had earlier struck a high of $1.4199, but today’s stress test concerns are pressuring the common currency.