Bernanke Comments Supported Dollar | IFCM
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Bernanke Comments Supported Dollar - 1.3.2012

US Dollar The dollar strengthened yesterday against the euro, the yen, the Australian dollar and the Swiss franc after the Federal Reserve President Ben Bernanke declared in his testimony to the House Financial Services Committee that monetary policy “is consistent with promoting” employment and price stability goals of the central bank in current conditions. The Fed chairman also warned that the US recovery was “uneven and modest” but did not indicated that more monetary easing is required at the moment. As a consequence investors increased demand for the US currency sending the dollar index from a three-month low 78.09 to 78.80. Nevertheless the dollar pared some of its yesterday’s gains in Asian trading hours today after China reported continuing improvement in manufacturing industry. China’s purchasing managers’ index rose to 51.0 in February from 50.5 in January. Today the data from the United States may also confirm the industry maintains growth. The Institute for Supply Management’s manufacturing index is expected to increase in February to 54.5 from 54.1, while personal spending is expected to rise by 0.4% in January. Euro The euro failed to breach its three-month highs at 1.35 versus the dollar yesterday and slid by the end of the day to 1.3314. Yesterday the Greece’s parliament approved another package of budget spending cuts moving closer to international financial aid. The nation’s Prime Minister Lucas Papademos reiterated that the government “will do its utmost to implement fully and effectively both the program and the complementary actions”. In Asian trading hours the single currency traded in a tight range of 1.3317-1.3355 before European Union leaders meet in Brussels today to discuss the region’s debt crisis. Australian Dollar After touching yesterday its 7-month high against the greenback (1.0855) the aussie fell to 1.0715. In Asian trading hours the Australian currency gained some ground rising to 1.0763 on improving Chinese manufacturing industry and rising Japanese capital spending, which jumped in the fourth quarter of 2011 by 7.6%. The Australian dollar is consequently still maintaining the range 1.0600-1.0850 against the greenback.
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