The Dollar has extended its gains against the Japanese Yen and has pared its losses against the Euro thanks to the release of a slew of economic data, and after Federal Reserve Chairman Ben Bernanke defended the US Central Bank’s stimulus measures.
Bernanke stood before Congress on Tuesday saying that the benefits of the Fed’s bond buying program, called quantitative easing, clearly exceeded possible costs. He defended the Fed’s unprecedented asset purchases, adding that he is supporting the expansion that should pose little risk of inflation or the creation of asset bubbles.
“We do not see the potential costs of the increased risk- taking in some financial markets as outweighing the benefits of promoting a stronger economic recovery,” Bernanke said today in prepared testimony to the Senate Banking Committee in Washington. “Inflation is currently subdued, and inflation expectations appear well anchored.”
Elsewhere the latest consumer confidence data exceeded economist predictions for February. The Conference Board’s Confidence Index rose to 69.6, exceeding forecasts and rising from the revised figure of 58.4 posted in January.
Tuesday also saw the release of the latest new home sales data which showed that new home purchases rose to their highest level since July 2008. Sales soared 15.6% to 437,000 yearly, far exceeding predictions.
The Dollar’s gains are expected to be short-lived as the currency will come under pressure over the course of the next few weeks thanks to the return of issues regarding the fiscal cliff and Federal budget.
Automatic cuts are set to begin on the 1st of March which will put significant strain upon the US and global economy. ‘Lawmakers’ are running out of time to avert the cuts. President Barrack Obama has a tough fight ahead of him to get the Republicans to agree to a compromise.
Current US Dollar Exchange Rates
The US Dollar to Euro (USD/EUR) exchange rate is trading at 0.7630
The US Dollar to Pound Sterling (USD/GBP) exchange rate is trading at 0.6590
The US Dollar to Canadian Dollar (USD/CAD) exchange rate is trading at 1.0253
The US Dollar to Australian Dollar (USD/AUD) exchange rate is trading at 0.9754
The US Dollar to New Zealand Dollar (USD/NZD) exchange rate is trading at 1.2056
The US Dollar to Japanese Yen (USD/JPY) exchange rate is trading at 92.0328
These exchange rates were correct as of 16:00 pm GMT
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