RTTNews - The dollar managed to steady Tuesday morning in New York as Wall Street sifted through a pile of earnings results and awaited key testimony from Fed Chairman Ben Bernanke, who is set to deliver his semi-annual monetary policy testimony to the House Financial Services Committee in Washington at 10 AM ET.
The Fed chief will face questions on about inflation and the sluggish economic recovery.
Further gains on Wall Street, which have fueled risk aversion and hurt the dollar of late, could depend on a slew of earnings results. However, with stocks looking at a flat open, the dollar has been able to stabilize versus the euro and loonie while pushing ahead against the sterling.
Yesterday, Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, predicted modest growth starting in the second half of the year, though he said there is not likely to be a strong recovery in the medium term.
In a report on the world's financial recovery released Monday, Moody's Investor Service said although the global banking system showed signs of improving, it still not out of the woods yet.
Despite general signs that the world's economy is stabilizing, and a profitable quarter for some banks, most are facing significant hurdles on their path to economic recovery, Managing Director Greg Bauer said.
The dollar was steady versus the euro Tuesday morning staying near 1.4200 after hitting a 6-week low of 1.4248 on Monday.
Versus the sterling, the dollar improved to 1.6400 after hitting a 3- week low of 1.6556 in the previous session. Back in June the dollar touched a 7-month low of 1.6744.
Meanwhile, the dollar extended a run of choppy trading versus the yen, firming up to 94.30.
The Bank of Japan board members all agreed that the Japanese economy had stopped worsening, minutes from the June 15 and 16 monetary policy meeting revealed on Tuesday. Moreover, they agreed that economy was likely to show clear signs of leveling out over time, in line with their projections made in April.
At the meeting, the board unanimously voted to hold the uncollateralized overnight call rate at 0.1%.
Against the surging loonie, the dollar failed to make up much ground, staying close to Monday's monthly low of C$1.1060.
The Bank of Canada will announce its latest interest rate decision at 9 am ET this morning. The target for the key overnight rate is expected to remain unchanged at 0.25 percent.
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