The Commerce Department released its Retail Sales report showing an unexpected drop in sales throughout the month of May due to intensified saving by consumers.

Federal Reserve Chairman Ben Bernanke is hopeful the economy will not fall back into a “double dip” recession. “My best guess is we will have a continued recovery, but it won’t feel terrific,” Bernanke said.

Ben Bernanke said yesterday that the economy appears to be on its way to a recovery from the 2008 financial crisis all thanks to the Fed’s economic recovery programs and stimulus.

The yen and dollar weakened after the Japanese and U.S. central banks pledged to keep interest rates near zero, boosting demand for stocks and higher-yielding currencies.

Despite the economic growth and improvements that are seen in the releases of the U.S. Official data for weeks, the Federal Reserve is still expected to be holding interest rates near zero for an extended period.

The dollar lost ground on Wednesday, falling from an eight-month high, after Federal Reserve Chairman Ben Bernanke told a congressional committee the U.S. economic recovery is not yet sustainable, and interest rates are likely to remain low for an extended period.

The FOMC raised the discount rate to 0.75% from 0.50%, effective tomorrow. The FOMC noted that the policy outlook is effectively the same as during the January meeting. But it also noted that it will assess whether further discount rate hikes are needed.

The yen fell against the dollar and the euro as Bank of Japan policy makers are expected to increase purchases of government debt to safeguard the recovery and limit the currency’s strength.

Bernanke killed every investor’s hope that the Federal Reserve Bank would recently raise interest rate, stating that when the time comes, the Federal Reserve will raise interest rates to keep inflation under control that time could be far away.

European Central Bank President Trichet on Tuesday backed comments by U.S. Federal Chairman Ben Bernanke on Monday about the importance of a strong dollar, helping to stress international concern about the U.S. currency.