The US dollar was mixed vs. most major currencies as markets paid attention to Federal Reserve Chairman Ben Bernanke’s congressional testimony. Earlier in the day, the dollar was higher as Bernanke stated that the central bank intends to maintain a “highly accommodative” monetary policy for an extended period. The statement was a cause for concern for some investors, as a reluctance to start tightening interest rates may mean that the Fed still sees some economic weakness ahead.
The euro traded within tight ranges against the dollar (1.4183-1.4277) as there weren’t any major economic releases from the Eurozone and the US.
The British pound fell against the dollar after the UK’s budget deficit climbed to its highest level since records began in 1993. The budget shortfall climbed to $21.4 billion in June, which beat forecasts of a climb to $25.5 billion, but fueled concerns that the government will struggle to find buyers for its assets.
The Japanese yen was slightly stronger against the dollar as investors bought the safe-haven currency on concern about the global economic recovery.
The Canadian dollar rose to its highest level in more than five weeks against the dollar after the Bank of Canada left its key interest rate at a record low 0.25%.
Also helping the loonie was crude oil prices which rose 1.5% to about $65 a barrel. Bank Governor Mark Carney said he plans to leave interest rates at a record low through June 2010.
The Australian and New Zealand dollar both fell from their highest level in more than a month as markets pared back expectations of a global recovery. A fall in risk appetite kept investors out of the high-yielding currencies.
