The dollar built on yesterday’s late gains following Ben Bernanke’s press conference.
The USD was stronger versus the G7 currencies as the rally in the greenback continued into today’s European session. Yesterday’s FOMC statement was overlooked as the 2nd press conference given by Ben Bernanke following a Fed Funds Rate release stole the show. Bernanke was adamant in the Fed’s expectations of a pickup in future growth numbers though the Fed did lower current year forecasts to 2.9% from 3.3% citing temporary factors. The Fed chief all but ruled out QE3 given the recent increase in inflation levels. Following the press conference the dollar began to gain and equities sold-off.
This environment continued today into the European trading session with the EUR/USD hitting a new low for the week. Strength in the greenback can be attributed a combination of dollar shorts covering, disappointment by those expecting QE3, and further Greek woes weighing on market sentiment. The EUR/USD is quickly approaching on the 100-day moving average and the next support comes in at the June low of 1.4070. A break here could test the May pivot at 1.3970.
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