US Dollar Weaker on Bernanke’s Comments

US dollar, after showing some strength in earlier trading, has moved lower since Ben Bernanke‘s remarks. Bernanke’s remarks on the US economy have raised doubts about the strength of the recovery, as well as provided clues that a loose monetary policy may not be over with. This has led to a weaker greenback.

Federal Reserve Chair Ben Bernanke mentioned the good news of an improving labor market in his remarks earlier. However, he also said that in order for the economy to improve, the Fed needed to maintain some of its policies in order to stimulate faster economic growth. This seems to indicate that interest rates will remain near zero for a while longer. Many forex traders take this to mean that the US dollar will be offering low yields for quite some time.
With this in mind, the US dollar is pulling back from earlier strength. The greenback is also being weighed on by higher gold prices, which are moving back toward $1,700 an ounce. Also helping the euro against the dollar is the confidence from ECB president Mario Draghi. He says that the worst is over, and this is providing a reason for some to turn to the euro instead of the US dollar.
At 13:24 GMT EUR/USD is higher at 1.3317, up from the open at 1.3271. GBP/USD is up to 1.5952 from the open at 1.5876.

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