By: DailyForex.com
The U.S. Dollar weakened across the board as investors await clues from the Federal Reserve Bank as to whether or not it will continue with its ultra loose monetary policy or begin to set the stage for tightening. Fed Chairman Ben Bernanke will be speaking to the U.S. Congress on Wednesday and recent comments by other officials of the Fed have given rise to speculation that the central bank may be pulling back on the stimulus throttle sooner than anticipated. The U.S. Dollar Index, a gauge of the greenback’s strength as compared to its peers, fell to 83.764 .DXY, a loss of 0.6% and well off the 3-year high struck only last Friday.
The USD/JPY pair traded at 102.31 Yen, a loss of 0.8% but recovering slightly from a session low of 102.16; late last week the pair had traded nearly 100 pips higher. There is some speculation that the Bank of Japan might this week decide to tinker with its current policy to slow the steady deterioration of the Yen and that has given it some support, but currency analysts believe that an outright halt is unlikely and that the loose policy will be maintained for the long term. The EUR/USD pair edged 0.4% higher to $1.2884, slipping back from a session high of $1.2894; last week the pair hit a 6-week low at $1.2795. The greenback also fell 0.9% against the Aussie Dollar and 0.6% against the Sterling Pound.