19, July 2013

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

The U.S. dollar rose against other major currencies in trading while investors comprehended comments from Federal Reserve Chairman Ben Bernanke, regarding the timing to minimize the program on economy stimulation.

In his speech before the U.S. Congress Bernanke said that the Fed may minimize bond-buying program, and then increase it in response to the economic slowdown. According to him, the Fed forecasts that later this year will slow down the pace of asset purchases, and the program will be terminated by mid-2014. The dollar weakened in the beginning of the Bernanke speech, but then regained lost ground. The dollar/yen pair rose to 99.58, while the euro/dollar pair fell to 1.3126.

The dollar has been the subject to fluctuations because Bernanke did not say anything new. He repeated that Fed pursued the policy of "cheap money" will continue in the near future, but the central bank can reduce the amount of asset purchases if the economy continues to recover. Last week Bernanke made a similar statement.

According to data released on Wednesday the total number of housing starts in the U.S. in June fell by 9.9% compared with the previous month, while the projected growth was of 3.9%. The number of permits issued for construction of multi-family homes also declined.