USD: a gradual appreciation?
US dollar strengthened versus its main counterparts on Thursday after the first day of congressional testimony from the Fed’s Chairman Ben Bernanke. Today Bernanke will continue his testimony at 14:00 GMT. While analysts differed over whether Bernanke’s comments were more dovish or hawkish than his remarks last week, traders seemed to focus on the eventual slowing of Fed stimulus.
Nomura: “We maintain our view that the US economy will gradually improve in the second half of this year. There’s no need to change our view on a mild strength in the dollar.”
UBS: “Bernanke’s remarks did not seem to suggest any major shift in his stance. Dollar will likely head higher gradually, due to the divergent monetary policy outlook for the United States and other countries. But if you ask whether there will be a sudden move higher in the dollar in the near term, we don’t see anything that could have that kind of an impact.”