Fed President Bernanke’s testimony and Q&A overnight prompted a strong reaction in currency markets. US Treasuries were off sharply overnight following Fed President Bernanke’s comments that the current QE could be tapered in coming months if data remained positive. Commodities were mixed overnight following the events in the US. Oil prices lost ground on the stronger USD and reports crude stocks remained higher than expected.

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Major currencies were largely in consolidation mode overnight ahead of Fed President Bernanke’s congress testimony tonight. The GBP was sold off sharply however following a weaker than expected inflation print. Comments from Fed speakers overnight poured some cold water on the possibility of the Fed tapering is QE scheme. Commodities were generally weaker overnight as USD strength kept prices subdued. Oil prices lost most of the previous session’s gains with WTI futures falling 0.8% to USD96.16 per barrel while Brent crude futures eased 1.3% to USD103.61 per barrel.

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US Fed member Evans commented overnight on how he believes the Fed should consider scaling back the pace of it asset purchasing program, however this failed to spark currency markets as analysts note a stalling prior to a host of central bank releases later this week. US treasuries remained unchanged overnight in an uneventful trading session whilst Commodities were stronger overnight largely due to a slightly weaker USD.

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Comments from ECB officials reignited discussion surrounding the next rate move on Friday, causing the EUR to weaken. The EUR hit a brief low below 1.2800 against the USD on Friday night before closing at 1.2838. US treasuries were sold off on Friday night following the stronger than expected University of Michigan confidence reading. Commodities were mixed on Friday night with better than expected US consumer confidence lifting prices before the stronger USD cut into the gains.

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The US currency swang between gains and losses in a volatile session overnight, before strengthening against the euro and the yen. US long term treasuries prices rallied on Thursday as weak US housing, manufacturing, jobs and prices data raised concerns about the world largest economy strength. World crude oil prices edged up on Thursday, lifted by a weaker US dollar.

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