Bernanke Gives Dollar Bulls Hope Once Again

The U.S. Dollar Index moved higher during a choppy Asian trading session following comments made by Ben Bernanke, the head of the U.S. Federal Reserve, wherein he gave hope to Dollar bulls who expect that the Fed’s quantitative easing scheme will be reined in before the year’s end. The Fed’s stance is still meeting with investors’ expectations of a loose accommodative policy in the short term, which was enough to support global equities and put the U.S. Dollar through a short-lived sell-off and then buy in as investors reconsider that before too long U.S. monetary policy will diverge from that of its major peers.

The U.S. Dollar Index edged 0.2% higher to trade at 82.856 .DXY, above yesterday’s 3-week trough of 82.342 .DXY. The EUR/USD pair slipped to $1.3096, a loss of 0.2% while the AUD/USD dropped 0.7% to trade at $0.9168, the Aussie Dollar pausing from its recent rally. The USD/JPY pair was trading slightly above par at 100.01 Yen and analysts believe that the greenback will continue to strengthen as the Fed begins to taper off its monthly bond purchases which could test the USD/JPY pair to levels not seen since May of this year.