Dollar up vs yen, down vs Europe before Bernanke
The dollar rises against the yen after a Govt report showed foreign investors buying a record amount of US securities in May.business Updated: Jul 18, 2007 11:49 IST
The dollar rose against the yen on Tuesday after a government report showed foreign investors bought a record amount of US securities in May.
A slightly larger-than-expected advance in producer prices last month also provided mild support for the greenback and helped ease concern that the Federal Reserve will soon have to cut interest rates.
However, the dollar failed to get much traction against the euro or sterling. The latter pushed to a 26-year high at $2.0476 after UK inflation data reinforced expectations of another rate hike from the Bank of England.
The Treasury's report on capital flows showed that "the United States is attracting more than enough foreign investment to finance its trade deficit," said Michael Woolfolk, senior currency strategist at The Bank of New York.
At the same time, he said investors appeared reluctant to pare back bets against the US currency ahead of Fed chief Ben Bernanke's semi-annual testimony before Congress on Wednesday.
Traders will listen closely for Bernanke's view on inflation and any comment he makes about the impact of subprime mortgage defaults on the broader housing market and economy.