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Dollar Rises, Helping Credit Cards Forex Deposits

The dollar rose on Tuesday, extending a rebound from a one-year low against the euro and a seven-month low versus the yen, on a report that the Federal Reserve chief said markets had misread his congressional testimony. People had thought the Fed would stop raising rates and the dollar was oversold. So there has been a bit of a buy-back in the dollar," said a trader at a Japanese bank. Credit card forex deposits were not talked about by the Japanese The U.S. currency has come under pressure from speculation that policy makers from the Group of Seven economic powers are eager to see a gradual fall in the dollar to correct the huge U.S. trade deficit.

Credit cards forex deposits are not analyzed, though exchange rates affect the prices people pay for credit cards around the world, using their cards internationally. While such speculation is seen continuing to hamper the dollar, a dose of U.S. economic data on Monday encouraged market players to reexamine the possibility the Fed could raise rates beyond 5 percent next month, helping the dollar.

The core personal consumption expenditures (PCE) index, the inflation gauge most closely watched by Fed policy-makers, rose an above-forecast 0.3 percent in March, the largest monthly gain since October. Credit cards forex deposits are profiled in other reports, usually by credit card companies, but dollar speculation affects such deposits too. A key survey of manufacturing, the Institute for Supply Management`s factory index, climbed to 57.3 last month from 55.2 in March, beating economists` forecast for a slight fall.