Thursday, 25 Jun 2009

Bernanke Testimony Weakens USD

Today's market witnessed some excitement as the EUR/USD jumped around during the testimony of Federal Reserve Board chairman Ben Bernanke. The day started slow with little volatility, and even less economic news. The EUR/USD was trading near 1.3950 before dropping throughout the early morning hours but spiked above 1.4000 at the conclusion of Bernanke's testimony.

These price movements represent the tug-o-war battle between safe-havens and higher-yielding assets. With confidence wavering, and reports on outlook providing mixed signals, investors don't appear to have a grip on what is safe and what is not. As such, these market fluctuations are likely to continue into the end of the week, and likely into next week. Tomorrow's early morning trading sessions will no doubt experience sharp volatility among the unique currency pairs as New Zealand and Japan are scheduled to release rather significant manufacturing and other economic data. As for later in the day, the Euro-Zone and Switzerland will give off some mild data on German inflation and consumer confidence, respectively, while the United States will add to this mix of economic data with its own consumer confidence reports. The Asian market hours tomorrow may turn out to be the most exciting, especially for the JPY and NZD crosses.