Dollar remains broadly firm today and breaches 1.33 level against Euro while dollar yen continues to press 92.14 resistance. Fed's Vice Chairman Kohn said that he's confident that Fed "can and will tighten policy well in advance of any threat to price stability" while he also expects a "gradual recovery" for the U.S. economy following fourth- quarter growth "importantly driven by inventory corrections." Nevertheless, San Francisco Fed Yellen, who might take the Vice Chairman Role after Kohn retires in June, said it's not time to tightening monetary policy yet. Yellen believes the current accommodative policy is appropriate as "the economy is operating well below its potential and inflation is subdued." Fed Chairman Bernanke is scheduled to testify before the House Financial Services Committee today in Washington on the strategy for withdrawing stimulus and will receive much focus from the markets.
Euro remains under tremendous pressure on concern of fiscal health in PIIGS countries ahead of two days EU summit today and hit new record low against Aussie. Investors remain deeply concerned of the development in Greece situation as well as in other countries in particular after yesterday's Portugal downgrade. German Chancellor Merkel has ruled out earlier this week a decision on the financial package for Greece in the EU summit and pushed for IMF to take central role in the rescue. Any comments from EU will trigger further volatility in the common currency.
Australia dollar get a lift in Asia by hawkish comments from RBA Assistant Governor Lowe. Lowe who said that rates are set to continue rising toward more normal levels as he predicted a terms of trade boom.He also expects Australian dollar to be higher than the average of the past decade. The semi annual financial stability review also said that Australian households and businesses are well placed to pay for higher interest rates. While Aussie is so far resilient against dollar, note that AUD/USD has broken a near term trend support and is possibly vulnerable to deeper fall. But after all, we'd expect cross buying to limit downside in AUD/USD.
Looking ahead, any development in EU Summit today would rock the markets. Focus will also be on Bernanke's testimony. Data to be watched include Eurozone M3 money supply, UK retail sales and US jobless claims.
Dollar index's rally extends further as expected as reaches as high as 82.06 so far today. Intraday bias remains on the upside and the medium term rise from 74.19 is expected to continue to 61.8% projection of 76.60 to 81.34 from 79.51 at 82.43 next. Below 81.56 will turn intraday bias neutral and bring consolidations but downside should be contained above 80.55 support and bring rally resumption.
Euro remains under tremendous pressure on concern of fiscal health in PIIGS countries ahead of two days EU summit today and hit new record low against Aussie. Investors remain deeply concerned of the development in Greece situation as well as in other countries in particular after yesterday's Portugal downgrade. German Chancellor Merkel has ruled out earlier this week a decision on the financial package for Greece in the EU summit and pushed for IMF to take central role in the rescue. Any comments from EU will trigger further volatility in the common currency.
Australia dollar get a lift in Asia by hawkish comments from RBA Assistant Governor Lowe. Lowe who said that rates are set to continue rising toward more normal levels as he predicted a terms of trade boom.He also expects Australian dollar to be higher than the average of the past decade. The semi annual financial stability review also said that Australian households and businesses are well placed to pay for higher interest rates. While Aussie is so far resilient against dollar, note that AUD/USD has broken a near term trend support and is possibly vulnerable to deeper fall. But after all, we'd expect cross buying to limit downside in AUD/USD.
Looking ahead, any development in EU Summit today would rock the markets. Focus will also be on Bernanke's testimony. Data to be watched include Eurozone M3 money supply, UK retail sales and US jobless claims.
Dollar index's rally extends further as expected as reaches as high as 82.06 so far today. Intraday bias remains on the upside and the medium term rise from 74.19 is expected to continue to 61.8% projection of 76.60 to 81.34 from 79.51 at 82.43 next. Below 81.56 will turn intraday bias neutral and bring consolidations but downside should be contained above 80.55 support and bring rally resumption.
