Bernanke Talks, the Dollar Listens

The Event: 

At 10:00 AM on Wednesday, April 14th, Federal Reserve head Ben Bernanke will testify before the Joint Economic Committee of Congress in Washington, DC.


This is one of the more critical talks by Bernanke through out the year.  It’s a 2 part speech with the first part being scripted.   The second half holds the most intrigue as it is an unscripted question and answer session.  The lawmakers can make some pretty off the wall and probing inquiries that sometimes cause the speaker to reveal information that they planned on keeping private.

Trader Take: 

Expect Bernanke to express his views on the international situation.  In addition, he should talk about ways to extract the Fed from the private sector.  Traders would be keen to expect some chatter about interest rates and monetary policy.  Be ready for increased volatility in the USD based pairs during this talk.  The USD is gaining some strength against the Euro after a several session Euro rally.  The pending Greek bailout bolstered the Euro and the Greek Treasury Auction showed some signs of improvement this morning.  However, traders remain cautious on the sustainability of the improvement. 

David Goodboy is Vice President of Business Development for a New York City based multi-strategy fund.

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