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Graphic Rewind: US Dollar Rises Despite Overnight Drop on Bernanke Comments

Graphic Rewind: US Dollar Rises Despite Overnight Drop on Bernanke Comments

Benjamin Spier, Technical Strategist

Talking Points:

  • Bernanke comments send US Dollar to an 8-day low
  • ECB and Fed commentary finish paring earlier decline

A look back at the past 24 hours of Forex trading using movements in the US Dollar Index:

Graphic_Rewind_US_Dollar_Rises_Despite_Overnight_Drop_on_Bernanke_Comments_body_Picture_1.png, Graphic Rewind: US Dollar Rises Despite Overnight Drop on Bernanke Comments

US Dollar 15-Minute 12:00 11/19 to 12:00 11/20 EST

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The Dow Jones FXCM US Dollar Index traded slightly higher over the 24 hour period that ended at 12:00 EST today, on a combination of ECB and Fed commentary.

The US Dollar slipped to a new 8-day low on Fed Chief Bernanke’s comments that the target interest rate may stay low even after quantitative easing has ended and that the Fed is committed to highly accommodative policies. The comments reiterated previous statements but were apparently still dovish enough to send the US Dollar lower.

The BoE minutes also reiterated that it too will not automatically hike interest rates when the unemployment threshold is hit. The Pound spiked briefly against the US Dollar before erasing those gains. Higher than expected retail sales sent the US Dollar higher, but most of those gains were also erased shortly after the release.

Finally, the US Dollar index saw a decisive move higher in the first half of the NY session, starting with a report that the ECB would consider cutting its deposit rate to -0.10%. After the greenback initially rose just against the Euro, it then continued higher against all currencies on Fed’s Bullard’s statement that taper is still on the table for the December Fed meeting.

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Charts created by Benjamin Spier using Marketscope 2.0

-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to instructor@dailyfx.com .

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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