The U.S. Dollar dipped against the common currency Euro following comments made by the current Fed chief, Ben Bernanke, who confirmed investors’ suspicions that the Fed would maintain its current ultra-loose policy for an extended period of time. Bernanke said that the Fed’s policy makers needed to see clear evidence that job growth in the U.S. labor market was steadily and durably improving before they would consider reining in the $85 billion in monthly bond purchases. Furthermore, he said that it was likely that the current benchmark interest rates would be left at their historic lows even beyond that time.
As a result, as reported at 12:57 p.m. (JST) in Tokyo, the EUR/USD pair edged up 0.1% to trade at $1.3554 on the EBS trading platform, easing back from the earlier 2-week high of $1.3584. The Euro’s momentum was enough to push the pair through stops, which in turn helped the Japanese Yen in its cross with the greenback; the USD/JPY pair slipped to 100.03 Yen, a loss of 0.1%, and moving well away from last Friday’s 2-month peak of 100.43 Yen. The EUR/JPY pair steadied at 135.54 Yen, slipping from 135.95 Yen, a 4-year high established earlier in the session.
Comments from Asia Offer Support to USD
The greenback had been under some initial pressure from commodity-linked currencies but recent comments made in Asia served to offer the greenback some support. Yesterday, the Chinese government hinted that it would be willing to accept a stronger Chinese Yuan while the Assistant Governor of the Reserve Bank of Australia confirmed that a weaker Aussie Dollar would be preferred by policy makers; those comments helped to send the AUD/USD lower to $0.9413, a loss of 0.2%.