RTTNews - The dollar remained on the defensive versus other major currencies Wednesday in New York as attention turned to Capitol Hill, where Fed head Ben Bernanke was once again grilled by lawmakers.
In Washington, Bernanke conceded that unemployment is the most pressing issue facing the Fed, but he noted that there are steps that Congress could take to ease the situation, similar to the already-passed extension of unemployment benefits.
Increased risk appetite has crippled the dollar of late, as traders but that recent gains in equities may hold as the grip of the recession loosens. The safe-haven dollar received support during the throes of the economic and financial crises, but has weakened of late in favor of higher-yielding counterparts like the euro and sterling.
The dollar fell to a new monthly low versus the loonie Wednesday after positive Canadian retail sales provided further evidence that the economy north of the border is coming around.
The buck dropped to C$1.0950, and will take out the lows of the year with a move to C$1.0780.
Canadian retail sales rose more than forecast in May, bolstered by stronger sales at automotive dealerships and hardware stores, according to data released Wednesday morning by Statistics Canada.
Retail sales in current dollars increased 1.2% in May to $34.0 billion, more than offsetting a modest decline in April. Economists were expecting sales to rise a more modest 0.5%.
The dollar was at 93.65 versus the yen Wednesday afternoon after touching a weekly low of 93.22 yen overnight. Against the euro, the dollar was heading back toward a 6-week low of 1.4276 set Tuesday.
Meanwhile, the dollar fell sharply versus the sterling, giving back mostly of its gains from the past two sessions. The dollar slipped to 1.6480, but is little changed from its June 1 level.
Minutes of the latest Bank of England meeting showed all nine members of the Monetary Policy Committee unanimously decided to continue with its quantitative easing measures worth GBP 125 billion and also stood united in retaining the Bank Rate at a historic low of 0.5%.
For comments and feedback: contact firstname.lastname@example.org