NEW YORK ( BBH FX Strategy) -- The U.S. dollar is consolidating after Wednesday's sharp rally in North American trading. Price action may be driven again by Fed Chairman Ben Bernanke after many observers perceived his comments Wednesday to be a bit on the hawkish side. We think it is unlikely that Bernanke would indicate a policy shift at this type of forum so we suspect Bernanke may try to recalibrate his communication this morning as a result.Follow TheStreet on Twitter and become a fan on Facebook. The tone of the market is broad dollar weakness with emerging markets and dollar bloc currencies leading the advance. The euro is up marginally to 1.333, with near-term support at 1.323 and resistance ahead of 1.35. The dollar is slightly lower against the yen, down 0.1%.
In Asia, China's Official purchasing managers' index improved slightly to 51.0 in February from 50.5 in January, marking the highest reading since last September. That is better than expected and marks the fourth monthly increase since the index bottomed out at 49.0 in November. However, the data is still close to recent lows, and remains only slightly in expansionary territory. With the leadership change this year, we believe the authorities will do everything possible to boost the economy and should successfully avoid a hard landing. Near-term, however, we expect continued softness in the data until the past stimulus takes hold. South Korea exports surged 22.7% y/y in February following the 7.0% drop in January. This pushed the trade balance back to a surplus from a deficit in January. This suggests that the worst in the trade deterioration is over for now, together with the improvement in global production, likely a source of support for the KRW.