19 July 2006, 10:19  US dollar is slightly easier against the yen

The US dollar was slightly easier against the yen in midday trading here, hit by profit-taking as the market prepares for testimony to the US Congress later today by Federal Reserve chairman Ben Bernanke, dealers said. At 12.00 pm (0300 GMT) here, the US dollar was at 117.21 yen, down from 117.33 yen in Sydney just over 2-1/2 hours earlier. The euro was at 1.2496 usd, the same as its level in Sydney. Bernanke will give two days of testimony to the US Senate and House of Representatives. "The market is eagerly waiting to see whether or not Bernanke makes any clear signs that there will be a pause in the series of interest-rate hikes," said Commerzbank treasurer Ryohei Muramatsu. "But his speech may not affect the firm trend of the dollar, because the market now focusses on geopolitical risk," he said. "And as long as a shift to safe-haven currencies continues amid growing anxiety about rising tensions in the Middle East, the dollar may test the the upper range of the 117-yen level," he said. As for the euro, Muramatsu said: "While tensions in the Middle East continue to support the dollar by triggering a flight to this safe-haven currency, there is also uncertainty emerging about the sustainability of the economic recovery in the euro zone after the end of the World Cup in Germany, thereby weakening sentiment towards the euro." He added: "As sentiment towards the euro is weakening, the market may test the strength of the downside target at the 1.2470-usd level.

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