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Dollar up in Asia after Bernanke testimony

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(Globalpost/GlobalPost)

The dollar gained in Asia Thursday after the US Federal Reserve said the bank's easy money policy would remain in place until it was satisfied the economy was strong enough.

The greenback changed hands at 100.05 yen in the afternoon, up from 99.60 yen in New York on Wednesday, while the euro fetched $1.3094 and 130.07 yen, against $1.3125 and 130.73 yen.

Fed boss Ben Bernanke told Congress on Wednesday that the central bank had no firm timetable for cutting back on its bond purchases, and that it would consider reducing its stimulus programme only if the US economy continues to improve.

"I emphasise that, because our asset purchases depend on economic and financial developments, they are by no means on a preset course," he told lawmakers.

He also said the economy was expanding at a moderate pace and showed solid signs of strength in various areas, a view supported by the Fed's closely followed Beige Book report, which was also released Wednesday.

"Bernanke's words were nothing new, but did have a calming effect for those still harbouring jitters about a near-term end of the US easing policy," said Hiroichi Nishi, general manager of equities at SMBC Nikko Securities.

The US unit rose further in afternoon trade as some investors who sold the dollar after interpreting the testimony as dovish may be buying back the greenback, said a senior dealer at a major Japanese bank.

Osao Iizuka, head of FX trading at Sumitomo Mitsui Trust Bank, told Dow Jones Newswires: "Since the key event is now out of the way, the market's focus is shifting to Japan's upper house election."

Japanese voters go to the polls on Sunday to elect half of the 242-member upper chamber of parliament.

A clear win for Prime Minister Shinzo Abe's ruling party could push the dollar up as control of both houses of parliament would enable him to continue unhindered with his big-spending policy measures, Iizuka said.

"The dollar should be relatively firm ahead of Sunday's election in Japan," a senior dealer at a Japanese major bank said.

Eyes will also be on a meeting of the G20 finance ministers and central bank governors in Moscow on Thursday and Friday, which is expected to discuss the Fed stimulus.

The dollar was higher against other Asia-Pacific currencies.

It gained to 59.73 Indian rupees Thursday afternoon from 59.29 rupees the previous day, to Tw$29.93 from Tw$29.76, to 31.08 Thai baht from 31.04 baht and to 43.47 Philippine pesos from 43.25 pesos.

The greenback firmed to Sg$1.2667 from Sg$1.2626, and to 1,125.65 South Korean won from 1,120.77 won.

The Australian dollar rose to 91.66 US cents from 91.22 cents while the Chinese yuan changed hands at 16.31 yen compared with 16.20 yen.

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http://www.globalpost.com/dispatch/news/afp/130718/dollar-asia-after-bernanke-testimony-0