Forex trading online: Slight rise in U.S. dollar after Bernanke´s testimony Wednesday

Forex trading online: The U.S. Federal Chairman, Ben Bernanke, gave his second speech in just two weeks on Wednesday (July 17th, 2013). In the previous week’s speech, Fed Chairman Bernanke caused a bit of a stir in the currency markets as his comments were not exactly as expected.

Whenever there is news concerning the currency value, traders in the Forex trading online market will react with a large buying or selling from one currency to another; as is in this case where the U.S. dollar dropped sharply after Ben Bernanke´s speech last week. 

This dip in the dollar was widely considered an overreaction to Bernanke´s comments last week. Forex trading online often will often help stabilize these overreactions since there are a large number of traders that invest in Forex trading online. However, since Fed chair Bernanke was due to speak again in the following – this time before Congress – there was a wait and see attitude. This time, there were fewer surprises from Bernanke that caused the “dollar [to rise] against a basket of major currencies on Thursday”, according to Reuters. 

The rise was not as great as expected because even though Bernanke had few surprises in his Congressional testimony, there was still some uncertainty. When there is uncertainty in the Forex trading online that will often result in many pivots in a currencies value in a short period as investors try to determine what the current and future value, the U.S. dollar in this case, should be. As currency strategist at Commerzbank, Peter Kinsella stated, “We are bullish dollar but we are getting mixed signals from the Fed,”.

“The dollar index edged up 0.2 percent to 82.8936 on Thursday, staying above a three-week low of 82.342 set on Wednesday [because the] dollar had been boosted by higher U.S. yields  but doubts over when the Fed will start withdrawing stimulus has kept it clear of three-year high struck on July 9.”, as stated in Reuters. There is likely to be more movement on Thursday (July 18, 2013) as Bernanke testifies before the U.S. Senate.