Forex

Bernanke’s Remarks Help Dollar

The US dollar recouped some of this weeks losses after Federal Reserve Chairman Ben Bernanke said he was contemplating an exit strategy from quantitative easing and low interest rates. After a heavy pummeling this week the greenback pulled back from a 14 month low against other major currencies. Many investors and traders have seen quantitative easing and low interest rates as the main causes for the dollar’s weakness.

Fed May Change Policies

In a statement late Thursday Bernanke said that the Fed has the ability to change both policies but said that present policies are likely to be continued in the near future. Recently the US dollar has fallen on very weak economic data and dismal employment figures and Bernanke’s comments were seen as dollar positive. Ulrich Leuchtmann of Commerzbank stated, “Explanations by Fed officials have been helpful in clearing the air on what strategy will be taken as the economy recovers. The market is not yet ready to jump on the rate rise outlook to aggressively buy the dollar.”