Ol’ Ben Franklin’s eyes are looking pretty weary and worn on the face of the hundred dollar bill these days. After strong demand for a 10 year Treasury bonds sale pushed down yields, the US Dollar fell to session-lows against both the Euro and Yen Wednesday.
Value of the Euro climbed nearly 0.9% to a high of $1.3745, maintaining the gains of the day which rose following release of Federal Reserve Chairman Ben Bernanke’s prepared Congressional testimony on the state of the economy. Meanwhile, in intraday trading, the dollar fell to Y82.20 following the auction.
Chairman Bernanke’s statements reiterate recent public remarks, reaffirming the current status quo, and leaving the current program of bond buying, known as QEII (Quantitative Easing II), intact.
A weakened dollar causes many economic changes if sustained over extended periods. For example, oil prices will rise, as will food costs, as commodities are priced higher to meet the value of the dollar. Imported goods cost more, while exports cost less to foreign buyers, potentially improving the trade deficit.
This was Chairman Bernanke’s first testimony on Capitol Hill since Republicans took control of the House of Representatives in early January.