The U.S. Dollar rose against the EUR on Monday as investors worried about the sustainability of the economic recovery in the wake of last week's discount rate rise by the Federal Reserve. The U.S Dollar also pared some of its losses on the Yen, rising to 91.25 yen, from 91.11 yen. According to analysts, near-term resistance is seen around 92.15 yen; the 1-month high struck last week.
This week, all eyes will be on Fed Chairman Ben Bernanke's testimony in Congress on Wednesday and Thursday. Investors will be looking for clues on rates after the Fed surprised many by raising the discount rate last week Economists have said that any such signal from Bernanke in the coming days could lead to some unwinding of huge long positions built on the U.S. Dollar in recent weeks. Still, traders say, any fall in the Dollar is likely to be short-lived on the back a growing belief that the Fed was likely to move first amongst the major central banks in tightening interest rates.
Traders are apparently expecting the greenback to trade in a range ahead of Bernanke's testimony and a slew of other U.S. economic data. U.S. housing prices for December are due today at 14:00 GMT as is the Consumer Confidence survey for February shortly thereafter.