The US Dollar Declines on Tuesday on Remarks of Bernanke

The dollar remained under pressure on Tuesday after the public address of Federal Reserve’s Chairman Ben Bernanke. The dollar index DXY which measures the US dollar’s performance against its six major rival currencies declined to 73.528 on Tuesday as compared to 73.981 on Monday’s North American trading session.

Bernanke admitted that the economy is sluggish and termed it as “uneven” and “frustratingly slow”, however the Fed’s Chairman said that the economy will pick up its pace in the second of the current year. He said, “Accommodative monetary policies are still needed,” Bernanke further added, “the best way for the Federal Reserve to support the fundamental value of the dollar in the medium term is to pursue our dual mandate of maximum employment and price stability, and we will certainly do that.”

Greenback’s major rival the euro performed after the comments of Bernanke and reached its 1.4696 on Tuesday as compared to 1.4577 on Monday’s late trading hours. Other than disappointing comments of Bernanke better economic indicator in euro zone region also helped the 17 nation’s shared currency.

Currency strategist from Barclays Capital commented, “Euro area retail sales and German factory orders surprised on the upside, a rare event in view of the numerous downside surprises received in recent days globally from various economic indicators.”

The British Pound also gained against the US dollar to 1.6444 on Tuesday as compared to 1.6353 on late Monday. The Greenback also declined to 80.05 versus the Japanese Yen as compared to 80.14 on Monday’s late trading hours.

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