US Federal Reserve shows confidence
Today Federal Reserve Chairman Ben S. Bernanke will begin his semi-annual monetary policy testimony to Congress. So far Bernanke is confident that the central bank will be able to stem inflation once it begins to raise interest rates. His comments have led the US dollar to rise against the euro to USD1.4202 from USD1.4231 yesterday.
Bernanke is convinced that the Fed has the necessary tools to withdraw policy accommodation when it becomes appropriate; as a result the US currency advanced the most against the South African rand and the British pound. The Fed's exit strategy of asset purchases and plan to keep inflation down are removing negatives for the dollar as they aim to revive the US economy for an extended time.
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