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Dollar lower ahead of Fed minutes, Bernanke

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Shutterstock photo - The dollar fell to session lows against the euro and the pound on Wednesday, ahead of minutes from the Federal Reserve's latest meeting and a keenly anticipated speech by Fed Chairman Ben Bernanke.

During U.S. morning trade, the dollar fell to session lows against the euro, with EUR/USD advancing 0.52% to 1.2846.

The dollar looked likely to resume its recent strengthening trend if the minutes of the Fed's June meeting and Ben Bernanke reiterated that the U.S. central bank is close to tapering its USD85 billion-a-month asset purchase program.

Data last week showing that the U.S. economy added more jobs than expected in June reinforced the view that the recovery in the labor market is on track.

Last month Bernanke said the Fed could begin to scale back its stimulus program by the end of the year is the economy continues to pick up.

The euro's gains looked likely to remain limited after a senior European Central Bank policymaker said Tuesday that the bank's forward guidance on interest rates extended beyond 12 months.

The dollar also fell to session lows against the pound, with GBP/USD rising 0.41% to 1.4925.

The pound dropped to its lowest since June 2010 against the dollar on Tuesday after unexpectedly weak U.K. manufacturing data increased the likelihood of further easing by the Bank of England.

The dollar was sharply lower against the safe haven yen, with USD/JPY dropping 0.86% to 100.26.

Demand for the safe haven yen was boosted after official data on Wednesday showed that Chinese exports fell unexpectedly last month, fuelling concerns over a slowdown in global demand. Imports were also lower, indicating that domestic demand was weakening.

The dollar was also weaker against the Swiss franc, with USD/CHF down 0.47% to 0.9683.

The greenback was broadly higher against its Australian, New Zealand and Canadian counterparts, with AUD/USD slipping 0.09% to 0.9168, NZD/USD falling 0.50% to 0.7815 and USD/CAD sliding 0.11% to 1.0514.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.53% to 84.39. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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