FOREX-Dollar pressured vs euro before Bernanke testimony
TOKYO, March 28 (Reuters) - The dollar came under pressure against the euro on Wednesday after softer U.S. consumer confidence data than expected and persistent worries about a slowing housing market prompted more talk of interest rate cuts.
Traders said the dollar dipped briefly earlier in the session on rumours that a conflict had broken out between Iran and the United States.
The U.S. Navy said it had no information to substantiate a market rumour that Iran had fired at a U.S. naval vessel in the Gulf and the the White House issued a denial.
Investors are turning their focus to Fed Chairman Ben Bernanke's congressional testimony, due to start at 1430 GMT. Of particular interest will be his view about the wider economic impact of the subprime mortgage sector's problems.
"The dollar looks weak before Bernanke's testimony," said a senior trader at a Japanese bank.
"I think it is because of caution against any bearish tone from the Fed chief about the overall economy, given the last post-meeting statement being adjusted to a neutral bias (from a tightening bias)," the trader said.
Bernanke's testimony comes a week after the Fed decided to keep rates unchanged at 5.25 percent and dropped a reference to the possible need for "additional firming" of monetary policy from its post-meeting statement.
The euro stayed firm around $1.3350 EUR=, little changed from late in New York, after jumping to $1.3370 earlier in the session on the rumours about Iran.
The single currency was also bolstered by a strong German business confidence survey on Tuesday, which reinforced expectations that euro zone rates are headed higher from the current 3.75 percent.
The dollar recovered to 117.95 yen JPY= from 117.66 hit earlier, on expectations of strong dollar demand from companies and investment trusts before the end of the month.
Other highlights on Wednesday include a report on the U.S. durable goods for February. Economists expect orders rose 3.5 percent in February, bouncing back after a tumble of 8.7 percent the previous month.
