The U.S. dollar fell against most of its major counterparts yesterday, reaching the weakest level versus the euro since November as oil rose above $100 a barrel for a second day amid unrest in North Africa and the Middle East. By yesterday's close, the dollar fell 0.6% against the EUR to 1.3863. The greenback was little changed against the JPY at 81.80, after earlier sliding 0.4%.
The greenback slumped versus the euro as Federal Reserve Chairman Ben Bernanke wouldn't rule out another round of asset purchases to spur the economy. Bernanke, in congressional testimony yesterday, signaled he'll keep the Fed on course to finish $600 billion of Treasury purchases through June. Another round of buys has to be a decision of the Federal Open Market Committee, and depends again on our mandate for stable prices and maximum employment, he said in response to a question. Bernanke said he doesn't want to see the economy to relapse into recession.
Another leading indicator released yesterday was the U.S. ADP Non- Farm Employment Change figure. This number handedly beat last month's result but failed to provide strength to the dollar as investors may be waiting for key data due to be released today to implement their trading strategies.
Looking ahead to today, there are few news releases coming out of the U.S. These include the Unemployment Claims and ISM Non-Manufacturing PMI at 13:30 GMT and 15:00 GMT, respectively. Better-than-expected results may help the dollar recover some of yesterday's losses against a number of its crosses, such as the EUR and GBP. On the other hand, if the results turn out to be lower than forecast, then the dollar may record a fairly bearish session in today's trading. Traders should pay close attention to the market as there is an opportunity for traders to capitalize on the fluctuations which are likely to follow these releases.