The EURUSD traded to an intra-day low of 1.5441 yesterday as Bernanke pointed to no further rate cuts in the near term. He continued in warning about inflationary pressures but that the US economic downturn has slowed. While energy prices have taken advantage of inflationary pressures and the falling dollar, further gains will find more resistance, particularly if the US dollar can begin a comeback. The EURUSD is still in a long term uptrend; however the risks to the downside, once again, are high.

The Australian dollar traded lower after the consumer sentiment index fell 5.6%. However, the market is pricing in a pair of 25bp rate increases by the end of Q4. Whether or not these hikes will be necessary remains to be seen as the direction of energy prices, for now, are unknown. The comdols, the Australian and New Zealand dollars particularly will be very much under pressure should commodities fall sharply in price.