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Dollar steady ahead of Bernanke testimony

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(Globalpost/GlobalPost)

The US dollar traded in a narrow range in Asia on Wednesday ahead of US Federal Reserve chief Ben Bernanke's congressional testimony.

The greenback firmed to 99.37 yen in the afternoon, up from 99.04 yen in New York.

The euro fetched $1.3143 and 130.56 yen, against $1.3164 and 130.43 yen.

The dollar-yen trade is steady with investors likely to centre their attention on what Bernanke has to say later in the day, HiFX senior dealer Dan Bell told Dow Jones Newswires, largely ignoring the release of minutes of a Japanese central bank meeting.

"As much as we will get some insight into what the Bank of Japan is thinking, the big event is the Fed this evening," he said.

The market will be looking for signs of when and by what degree the Fed's monetary easing policy might be reeled in, dealers said.

The winding down of the easing will support the US dollar as it will push up yields on US Treasury bonds.

Dealers are watching for signs of any firming up of plans to trim back the $85 billion-a-month bond purchases later this year or if Bernanke will hint that economic growth needs to be stronger before that happens.

Bernanke will speak to the House of Representatives Financial Services Committee later Wednesday.

Bernanke has struggled to get his message across in recent weeks and has been at pains to stress that even if the Fed begins reeling in its quantitative-easing program, it does not mean interest rates will increase and monetary policy will be tightened before 2015.

But markets have been sceptical, with bond yields and interest rates climbing sharply since May in expectation of tightening.

The dollar was mixed against other Asia-Pacific currencies.

It slipped to 59.29 Indian rupees from 59.37 on Tuesday, to Tw$29.765 from Tw$29.829, to 31.04 Thai baht from 31.07 baht and to 43.25 Philippine pesos from 43.30 pesos.

The greenback firmed to Sg$1.2626 from Sg$1.2609, and to 1,120.77 South Korean won from 1,118.00 won.

The Australian dollar fell to 91.22 US cents from 91.82 cents while the Chinese yuan changed hands at 16.20 yen compared with 16.28 yen.

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http://www.globalpost.com/dispatch/news/afp/130717/dollar-steady-ahead-bernanke-testimony-0