Bernanke Testimony Sinks The Dollar Before NFP Lull

The tentative dollar rebound from Tuesday was stalled today by an ominous forecast for the economy from Fed Chairman Bernanke during his testimony before Congress. For the majors, the policy official’s remarks led EURUSD to hold a long-term rising trend and rally over 100 points to 1.57. The pound, despite disappointing data of its own, took advantage of the weakened greenback to confirm a triple bottom and rally back to 1.99.

Risk considerations proved to have an influence on the benchmark currency’s direction as well. The yen actually lost ground against the dollar through the early New York session to extend the notable break from yesterday, while the Swiss franc rose nearly 90 points to 1.0070. The high-yielding pairs had the benefit of the risk rebound and weak US currency, sending AUDUSD and NZDUSD back to 0.9150 and 0.79 respectively. Finally, the range bound Canadian dollar pair was able to extend a reversal to around 1.0150