Greenback growth spurred by Bernanke Congressional testimony

Posted On: February 29, 2012
Testimony from the chairman of the U.S. Federal Reserve boosted the value of the dollar on Wednesday against the common currency of the European Union, according to published reports.

The world's reserve currency also climb against the Japanese yen after Ben Bernanke commented on the "positive developments" among the labor market,, Bloomberg reports.

"Bernanke's cautious optimism did come from left field in terms of a hard reminder for euro-dollar traders that the development of balance sheets is the most important factor driving currencies," Kathy Lien, director of currency research with online-trading firm GFT Forex in New York told Bloomberg. "That the Fed didn't feel any type of urgency to expand their balance sheets was very positive for the dollar."

But the value of the euro already had dropped after the European Central Bank provided three-year loans to debt-hobbled euro zone banks.

MarketWatch reports some analysts said Bernanke, when he testified on Capitol Hill before the U.S. Congress, did not sound as if he is ready to kick off a third round of asset purchases, which is known as quantitative easing.

Category: Industry News

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