Currency Exchange News for today

The USD initially strengthened then gave back its gains for the second day in a row after Ben Bernanke’s two day congressional testimony. The final interpretation of the Fed Chairman’s address reflected that of the FOMC’s last statement, which loosely translates to additional monetary stimulus being implemented only if data should show further signs of economic weakening.

The minimal over night market movements would suggest that some long term ‘Euro short positions’ have now been squared and as such today’s Spanish bond auction results are likely to dictate the next short term move for the Euro. As it stands sentiment remains ‘bearish’ for the Euro however as summer markets are upon us the Euro opens firmer and currency markets will lack liquidity going forward. Meanwhile, Sterling has again held onto gains made this week although the resistance level at $ 1.5700 has yet to be tested and there is rumoured corporate interest to sell.

Commodity currencies led by the Aussie $ are firmer after news stated that the Bundesbank are expected to add AUD’s to its reserves in Q3; could this suggest the possibility of selling Euro’s? Also, as tensions rise again in the Middle East oil trades back above the $90.00 level and should the situation worsen then the USD may attract further buying interest.