By Michael Kitchen, MarketWatch
LOS ANGELES (MarketWatch) — The safe-haven U.S. dollar and Japanese yen traded fractionally higher during Asia hours Monday, while the euro edged lower, with investors focused on upcoming testimony from U.S. Federal Reserve Chairman Ben Bernanke.
The dollar index DXY +0.11% , which tracks the U.S. currency against six other units, ticked higher to 83.330, up from 83.324 late Friday in North America.
Against the yen, however, the dollar USDJPY -0.36% eased to 79.10, down from 79.29 late Friday.
The euro EURUSD -0.30% moved slightly in the other direction, ebbing to $1.2242 from $1.2245 but still above a two-year low of $1.2156 hit Friday. Read more on Friday’s currency action.
Barclays analysts said in a note Monday that Bernanke’s semi-annual testimony to Congress, slated for Tuesday and Wednesday, would provide near-term focus for the forex markets, with the greenback likely to gain unless the Fed chief suggests fresh policy-easing moves are coming soon.
“Chairman Bernanke is not likely to give an indication that further easing is imminent. That added to negative earnings surprises in the U.S. may weigh on risk sentiment in the near term, boosting the [U.S. dollar] more broadly,” they said.
“Despite the recent build-up [in] long positions, we do not see [the dollar] as particularly vulnerable to a more accommodative policy stance, should such a shift be perceived. Indeed, to the contrary, the outlining of additional Fed stimulus options could work to the [dollar’s] benefit, given currently heightened levels of investor risk aversion surround Europe,” they said in terms of the dollar’s value against the euro.
Among other major currency pairs, the British pound GBPUSD -0.17% slipped to $1.5573 from $1.5578 late Friday, while the Australian dollar AUDUSD -0.23% inched down to $1.0221 from $1.0227.
Michael Kitchen is Asia editor for MarketWatch and is based in Los Angeles.
