Bernanke Speech Gives USD a Boost

By IBTimes Staff Reporter | February 11 2010 6:30 AM

The U.S. Dollar received a fairly significant boost on Wednesday following reports that the U.S. Federal Reserve (FED) would soon raise discount lending rates. FED Chairman Ben Bernanke made the announcement, leading investors to believe that U.S. economic policy would tighten at a quicker rate then its major counterparts. The Dollar index rose to 80.80 as a direct result of the announcement. Currently the greenback is up against both the Euro and British Pound with the pairs trading at 1.3779 and 1.5631 respectively.

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The Dollar is forecasted to continue its uptrend today, especially against the Euro. Investors are largely keeping their distance from the ailing European currency, especially ahead of a key European Union policy meeting. With the single currency plagued by record high deficits in several of its countries, risk aversion seems to be the prevailing trend among investors. USD has been benefiting greatly from this, and it appears that it will continue to do so.

In the only significant Dollar news event today, the weekly American unemployment claims are set to be released at 13:30 GMT. With the number of Americans who filed for first time unemployment insurance forecasted to drop, traders can expect the greenback to receive a boost in afternoon trading. Of course, should the figure come in above the predicted 460K, the Dollar may take some losses later today.