Mr. Bernanke painted a new road map for the U.S. economy and push the dollar once again strongly 22/7/2009

The Federal Reserve Bank’s Chairman Ben S. Bernanke testified yesterday before the House Panel on the monetary policy, Bernanke signaled that conditions seem to have improved recently as the pace of contraction started to ease “significantly”, yet Bernanke signaled that the labor market continued to weaken as companies continued to layoff more workers, and he said the Feds will continued to provide aid for financial markets, as they decided to slash their interest rates down to a historical low rate between 0% and 0.25%, while the Feds also expanded their balance sheet to $2.07 trillion in order to facilitate lending and ease constraints in the financial system. And say that the monetary policy will continue to be focused on “fostering economic recovery”, and accordingly the Feds will maintain an accommodative monetary policy for an extended period of time ,Bernanke stressed that the Feds can withdraw the huge amounts of liquidity, and accordingly be able to control upside risks to inflation in the future ,he also called for more regulatory reforms over the financial system, as he signaled the need to focus on the stability of the financial system as a whole. In Australia the Yearly CPI rose 1.5% in the second quarter compared with a previous 2.5% and it came meeting forecasts, while quarterly consumer prices gained 0.5% compared with a prior incline by 0.1%. The euro dollar pair dropped today having the euro trading around $1.4182. The pair went below the 1.4200 level yesterday and today it is having a support at 1.4160 along with a resistance at 1.4223. Pessimism is dominating the market so it is expected that the pair will break the support and reach 1.4123. The pound dollar pair declined as well having the royal currency trading around 1.6390 and the pair recorded a low at 1.6391 and a high at 1.6464. Yesterday fundamentals showed that public sector net borrowing declined to 13.0 billion pound in June from a prior 18.6 billion pound, which pressured the pound to take a downturn.

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