American focus: Bernanke’s speech led to USD’s rise stop.[E]

The dollar winning pace on Wednesday was stopped by Fed Chairman Ben Bernanke’s speech to a Congress which appeared less “hawkish" than expected. Despite Bernanke signaled his concerns about inflation growth, he left the rates hike question opened while speaking today and didn't hint on further quarter points tightening to 5.5%. He added that Fed should keep a “flexible policy".
The Fed’s chief mentioned the U.S. economy seems slowdown amid high oil prices and real estate cooling. Ahead Bernanke’s testimony USD firmed the six-days in a row versus euro. Besides the rate reached three-month peaks versus Japanese yen.
Earlier USD gained thanks to strong inflation data. A government report showed CPI +0.2% gain versus +0.4% in May. Besides the core CPI ex. food and energy added +0.3% exceeding average forecasts +0.2%. A report yesterday showed a 0.5% climb in PPI last month, after 0.2% in May. The core rate rose 0.2% and was up 1.9% y/y. Obviously inflation processes continue to support the view on a possible Fed key rate hike in August. Last month the Fed lifted its overnight rate to 5.25%.
The euro also have got a support from a German government PPI
report today showing inflation in Europe's largest economy accelerated. This is backing the case for the ECB to raise borrowing costs next month from current 2.75%. Figures showed goods were 6.1% more expensive in June than a year earlier. Economists expected a gain of 5.9%. ECB lifted its benchmark for two times since December 2005. Analytics believe the EU refinancing rate to climb to 3.0% on August 3.
The yen gains are limited amid North Korea tensions. As Korea journal JoongAng Ilbo informs, North Korea leader urged the militaries and civilians for alert after it fired seven
missiles into the Japan Sea on July 5. Within those missiles was Taepodong-2 which can reach Alaska’s coast, some American officials said. Last time country was in alert 13 years ago after “nuclear
agreement” was canceled. OUN’s resolution on North Korea to cut further fires was signed on July 15. Besides it was forbidden to buy or sell such technologies.
Wall Street continues to trade in black after soft Bernanke’s testimony. Tech Nasdaq composite was under pressure after Yahoo second-quarter results and third-quarter outlook disappointed investors. But two hours after the bell stocks jumped as Fed Chairman Ben Bernanke left rates hike question opened when speaking today. Late Tuesday Internet-operator Yahoo! said quarter results rose from a year ago and missed estimates. The company also made a forecast on third-quarter revenue that disappointed
investors. IBM has slightly gained after company Q-earnings report testified a record Q2 profit per share which topped estimations. Oil continued weekly correction. As to EIA report last week oil inventories grew on 0.2 m barrels to 335.5 m barrels.