U.S. Dollar Trading Narrowly in Asia as Investors Await Bernanke Testimony

The U.S. Dollar traded within narrow ranges in Asian trading today, as traders await the Federal Reserve’s report to the U.S. Congress tomorrow.  Some investors are speculating that Ben Bernanke, the Federal Reserve Bank Chairman, would quash rumors of possible monetary tightening, and have avoided the U.S. currency as a result.

This speculation was reinforced by comments made yesterday by another Federal Reserve official; Janet Yellen, president of the San Francisco branch of the central bank, remarked that the country’s “undesirably low” inflation rates meant that the current historical low interest remains would remain in place.

As reported at 2:14 p.m. (JST) in Tokyo, the U.S. Dollar Index, the measure of the greenback’s strength versus other major currencies, traded flat at 80.543 .DXY, well off the 8-month peak struck last week.

Meanwhile, the Euro gained versus the U.S. Dollar, trading at $1.3620, a .2% increase and holding steady above the 9-month trough struck on Friday when it traded at $1.3443.

Since the beginning of 2010, the Euro has lost nearly 5% of its value versus the greenback, attributed primarily to investor concerns over Euro-zone debt and the possibility that certain European nations, specifically Greece, Portugal and Spain, may need to be bailed out.