Mere moments ago, I looked at Fed Chair Ben Bernanke's comments to Congress. Let's take a look at how the dollar is reacting to what the Fed head said. The dollar has dropped versus its major foreign counterparts, with the dollar index 0.2% lower at last check. Ahead of Bernanke's testimony, the dollar index was 0.2% higher.
Today's drop is just the latest in a recent series of pressures applied by the economy. The dollar has dropped thanks to expectations that the U.S. housing market will continue its stumbling and that credit-market problems will hurt economic growth. Continued concerns about these factors have some believing that the Fed could cut rates further, which could harm the dollar further when compared to its foreign cohorts. Many are interpreting today's comments from Bernanke as a hint that rates may be lowered again, while some are waiting to hear everything that Bernanke has to say before leveling judgement.