Dollar Traders Jittery Ahead of Bernanke

The U.S. Dollar was struggling for traction ahead of today’s Congressional testimony for the Federal Reserve Chairman. Investors with long dollar positions were few and far between as the majority of them clearly decided to sit on the sidelines until after Ben Bernanke makes his statement, wary of the possibility that his comments could be construed as dovish despite the recent Fed minutes to the contrary. Analysts believe that he will make an attempt not to be too hawkish in order not to jar the equities market but the U.S. Dollar’s recent bullish trend is likely to evaporate in the short term or at least until there is more clarity.

The U.S. Dollar Index held at 82.54, very near to the recently truck 3-week low after falling 0.6% during the overnight trading hours in New York; the Index is used by currency traders to gauge the greenback’s relative strength. The EUR/USD pair edged higher to $1.3140, a decline of 0.15% since the day’s trading began, but close to the peak of $1.3208 struck last week. The USD/JPY pair gained 0.4% to trade at 99.45 Yen, getting some support from Japan’s exporters, but the pair was well off July’s peak of 101.53 Yen.