The US dollar has pulled back against many of the majors, including the euro and Japanese yen, as comments by Federal Reserve Chairman Ben Bernanke in a speech to the Council on Foreign Relations has helped to spur a pick up in risk appetite, as also evidenced by gains in DJIA and S&P 500 futures.
Bernanke said that the US will ensure banks have sufficient capital, and urged the overhaul of rules for the biggest financial firms in order to “make the financial system as a whole better able to withstand future shocks, but also to mitigate moral hazard and the problem of too big to fail by reducing the range of circumstances in which systemic stability concerns might prompt government intervention.” There is now a Q&A session with the audience which could yield more market-moving comments.
The DXY index is currently testing the March 6 lows and trendline support near 87.88/88.00, with a break below likely to signal a turn for the currency. However, if the index manages to close above noted support by the end of the day, risks for the greenback may remain to the upside.
[B]DXY Index (Daily Chart)[/B]
[I]Source: Bloomberg[/I]