The Euro steadied against the greenback in Asian trade as short-term focus is directed to Washington, D.C. where Federal Reserve head Ben Bernanke will be testifying before the U.S. Congress tomorrow. Markets are anxious to see if the Fed Chairman will provide any additional clues as to the Fed’s imminent monetary policy direction. Analysts are doubtful that the Fed head will actually indicate a change in the FOMC’s position, but many agree that Bernanke likely won’t shut the door entirely.
As reported at 10:48 a.m., the Euro was trading at $1.2242, close to the 2-year trough struck on Friday on the EBS trading platform. Should Bernanke not hint at easing, the greenback should see some strengthening, not just against the Euro but also the Japanese Yen. The USD/JPY pair had earlier dropped to 79.09 Yen, a decline of 0.2% and approaching its support level at 79.04 Yen, the 200-day moving average.
In light Asian trade due to a Japanese holiday, the Australian Dollar is lower today after giving up some of Friday’s gains following a better then expected GDP outcome from China. The AUD/USD pair was trading at $1.0223, a decline o 0.1%, but only a notch in the 1% gain made on Friday.