The dollar has been firming up in the last several weeks, thanks in large part to growing expectations of a tighter monetary policy leading to higher interest rates. Federal Reserve Chairman Ben Bernanke tried to reassure Americans and quash some of those assumptions with his comments to Congress about the economy Wednesday (February 24).

Bernanke says he anticipated interest rates remaining low to give the still recovering economy and uncertain housing sectors time to grow. While he still seems very optimistic about the direction of things, Bernanke did seem to think there is more work to do and keeping borrowing costs low is important to the recovery process.

Supporting Bernanke’s notion of more work, a Wednesday report on housing did show record low performance for existing home sales in January. This was especially alarming given analysts forecasts of sales growth for the month. It is also a clear sign that the housing market still needs support to dig itself out of the ‘mud’.

Following Bernanke’s remarks, the dollar traded weaker. Speculators have been building the dollar based on the assumption of higher rates to come, meaning higher interest yields. It now appears it may be a while yet before rates are increased. The dollar fell slightly against most major currencies.

Oil prices jumped toward $80 following Bernanke’s comments, due mostly to the dollar’s weakness. Gold, which had been trading down in the last couple days, is up a very modest $3 and change in New York trade. The current spot gold price is $1,095.10.

Oil trade has been pretty heavy of late based on a variety of market factors. The dollar has affected oil prices, as have recently conflicting report on inventory supplies. The Energy Information Administration issued its weekly report for last week on Wednesday and indicated a 3 million barrel rise in crude stockpiles.

The American Petroleum Institute issued its report on Tuesday and said crude levels fell by about the same amount, nearly 3.1 million barrels. The conflicting numbers are strange, but also highlight the general uncertainty of direction in oil prices of late.

Most analysts believe oil is settled in the $70s for some time, with $80 having provided a definitive ceiling, or resistance point, at every opportunity.