By William L. Watts, MarketWatch
LONDON (MarketWatch) -- The U.S. dollar was slightly lower versus most major rivals Wednesday as investors awaited testimony by U.S. Federal Reserve Chairman Ben Bernanke for clues to the central bank's monetary policy outlook.
Bernanke earlier this week sounded a modestly optimistic note on the outlook for the U.S. economy, saying that he didn't expect to see a double-dip recession. Read about Bernanke's economic assessment.
Bernanke is unlikely to alter his assessment in testimony before the House Budget Committee, but will be watched for any sign the rate-setting Federal Open Market Committee is preparing to alter its longstanding pledge to hold interest rates at low levels for an "extended period," said economists at KBC Bank in Brussels.
"If so, it should be dollar positive," they said, in a research note.
But Marco Valli, economist at UniCredit Bank in Milan, said Bernanke's unlikely to give such a signal amid ongoing turmoil in the euro zone and last week's disappointing May U.S. jobs data.
The Fed is also set Wednesday to release its Beige Book report on economic conditions across the central bank's districts.
The dollar index (DXY 88.00, -0.39, -0.44%) , which tracks the U.S. unit against a basket of six major currencies, traded at 88.019, down from 88.307 late Tuesday.
No major European or U.S. economic data is set for release Wednesday.
The euro (CUR_EURUSD 1.1974, +0.0003, +0.0251%) traded at $1.1973, up from $1.1942 late Tuesday. Against the Swiss unit, the euro (CUR_EURCHF 1.3744, -0.0052, -0.3768%) traded at 1.3750 francs, down from CHF1.3784 francs late Tuesday, a day on which the euro hit an all-time low at CHF1.3744.
The single currency remains in a fragile state amid ongoing worries about sovereign debt and its potential impact on euro-zone growth.
The greenback suffered somewhat in early European trade after a purported leak by Chinese government officials indicated China's May exports surged 50% from a year ago compared to forecasts for a 30% rise, said Boris Schlossberg, director of currency research at GFT.
The report spurred a rise in risk appetite, boosting Asian equities and undercutting the U.S. dollar.
The leak helped ease fears of a global double-dip recession and suggested European demand may remain more robust than previously thought, Schlossberg said.
"We are highly skeptical of this theses given the fact that serious austerity measures in the euro zone have yet to kick in," he said. Austerity measures could cause demand to drop sharply in the second half of this year.
The euro (CUR_EURYEN 108.9000, -0.7500, -0.6840%) traded at ¥109.47, up from ¥109.01 in late North American trading on Tuesday. One U.S. dollar (CUR_USDYEN 91.4900, -0.0400, -0.0437%) bought ¥91.42, up from ¥91.32. See live currency market quotes.
The British pound (CUR_GBPUSD 1.4517, +0.0053, +0.3664%) changed hands at $1.4493, up from $1.4404.
