Earnings season appears to be cushioning the fall in both the US dollar and the Dow.

Equities, bond yields and the US dollar all recovered today amidst the lack of any US economic data.

With no economic data released today, the only thing that could rattle the currency markets was a reversal in US stocks.

As a big proponent of transparency, Federal Reserve Chairman Ben Bernanke had no surprises for the market when he delivered his testimony on the economy and monetary policy to the Senate today. The question and answer session continued to center on the problems in the sub-prime sector and Bernanke responded by reiterating the Fed’s growing concern that the problems in housing could get worse before they get better.

To the surprise of the market, Federal Reserve Chairman Ben Bernanke shifted his tone ever so slightly in his congressional testimony on the economy and monetary policy.

New highs have become a regular daily occurrence in both the currency market and stock market.

New records will either be made or lost this week because not only do we have a very busy economic calendar, but Federal Reserve Chairman Ben Bernanke will also be delivering his semi-annual testimony on the economy and monetary policy. The weakness of the US dollar and continual rise in oil prices will keep the Federal Reserve hawkish as they bank their hopes for a second half recovery on the movements of the US currency.

US consumer spending dropped by the largest amount in two years, yet the dollar only weakened modestly. As the backbone of the US economy, the level of spending is generally seen as a reflection of not only how the US economy is doing presently, but also how it could perform in the months to come.

The greenback moved broadly lower against major counterparts, with the NYBOT-traded Dollar Index falling to fresh multi-year lows.