The Greenback was under pressure last week, especially versus the commodity dollars which all rose significantly. Strength in the commodity currencies was usually attributed to stronger oil and commodity prices, as well as higher yields and increasing interest rate differentials favoring those currencies versus the U.S. Dollar.

Overall, the U.S. Dollar was down against most major currencies, with the exception of the Yen, against which the Greenback rose after dovish comments from the BOJ in its last monetary policy meeting minutes. Also, the Euro traded down just a fraction versus the Greenback - specifically -0.1% - on the back of better than expected stress test results for European banks.

The focus for the U.S. Dollar last week was on Fed Chairman Ben Bernanke's two-day testimony before the U.S. Congress that was held last Wednesday and Thursday. Bernanke's comments had an immediate negative effect on U.S. equities, which tanked one percent immediately thereafter.
 
On Wednesday, the Fed Chair stated, "Even as the Federal Reserve continues prudent planning for the ultimate withdrawal of monetary policy accommodation, we also recognize that the economic outlook remains unusually uncertain." He continued, "We remain prepared to take further policy actions as needed to foster a return to full utilization of our nation's productive potential in a context of price stability."
 
Bernanke's "unusually uncertain" description of the U.S. economic outlook came on the heels of the previous week's FOMC meeting minute's dovish bombshell statement. The minutes cited participant's anticipations of the economy's full convergence to its "longer-run path" and that "most expected the convergence process to take no more than five to six years." This indicated the significant level of pessimism that the influential members of the FOMC who had participated in the monetary policy meeting continued to have concerning the U.S. economy.

Nevertheless, U.S. stocks rallied back despite the initial bearish response to Bernanke's testimony and eventually delivered the second best weekly performance for U.S. stock markets all year. The Dow Jones Industrial Average gained 3.2% on the week, while the broader based S&P 500 Index increased by 3.5%, and the Nasdaq closed 4.1% higher. The stock market was further supported by higher earnings reports from major corporations such as General Electric, Ford Motor and Verizon Communications. The U.S. Dollar Index was roughly unchanged on the week, while the 10-Year Treasury bond rose 1.9%.

Commodity prices were also higher overall last week, with crude oil rising 3.9% to close the week at $78.98 per barrel, although gold closed virtually unchanged at $1,187.80 per ounce versus the $1,188.20 close seen the previous Friday.

Last Week's U.S. Data Review

Overall, the economic news out last week generally hurt the Greenback, especially against the commodity currencies, as United States economic numbers seen last week were for the most part on the disappointing side.  Furthermore, the economic calendar for the United States had relatively few major releases last week, with attention generally focused on the U.S. housing market.

Releases began on Monday with the NAHB Housing Market Index, which came out at 14 versus a reading of 16 expected while the previous number was revised downward
to 16 from 17. Building Permits, out on Tuesday, came out at 0.59M as was widely expected, while Housing Starts came out at 0.55M. This was the lowest level seen for the number since October and was considerably lower than the consensus of 0.58M expected.
 
On Wednesday, the aforementioned statements by Fed Chairman Bernanke before Congress sent the U.S. Dollar and U.S. equity markets lower, while Crude Oil Inventories came out better than expected, rising by 0.4M versus an expected decline of -1.1M.

Thursday saw the release of Initial Jobless Claims which had expanded to 464K, considerably worse than the 449K expected. Also on Thursday, Existing Home Sales showed some improvement by coming out somewhat better than expected at 5.37M versus the 5.18M expected. Thursday brought the week to an end since Friday had no major economic releases scheduled for the United States.

Fundamental Data Outlook for the United States

The coming week of economic data releases for the United States is moderately active, similar to the previous week, and offers some interesting data for forex traders on the U.S. economy. The U.S. economic calendar features Friday's key Advance GDP data.

The week commences on Monday with just New Home Sales (317K) due out. That is followed on Tuesday with the S&P/CS Composite-20 HPI (3.8% y/y), as well as the important CB Consumer Confidence index (51.5) and the Richmond Manufacturing Index (20).

Wednesday offers Core Durable Goods Orders (0.6% m/m), plus Durable Goods Orders (0.9% m/m) and the closely watched Fed Beige Book. Thursday only has Initial Jobless Claims (456K) out in terms of notable releases, and Friday closes the week with plenty of action.

Releases due out on Friday include the highlighted Advance GDP number (2.5% q/q), plus the related Advance GDP Price Index (1.1% q/q) and the Employment Cost Index (0.5% q/q). Also out on Friday are the Chicago PMI (56.1), the Revised University of Michigan Consumer Sentiment survey (67.5) and University of Michigan Inflation Expectations (last 2.9%).