Stock Market Watch

Forex Market Update: Dollar Falls against All Major Traded Currencies after Bernanke’s Comments

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The U.S. dollar traded broadly lower on Thursday after the dovish remarks from the Federal Reserve Chairman Ben Bernanke suggested that the bank’s extremely accommodating policy- the $85 billion worth monthly bond purchase program, will continue for the time being.

While addressing a group of economists at the National Bureau of Economic Research, Bernanke said that the bond purchases program will not be stopped in the immediate future since the U.S. economy still warranted some support through monetary easing.

In addition, the Fed’s minutes from its latest open market committee meeting (FOMC) showed that the policymakers were divided over the timing of the winding down of the asset purchases. While half of policymakers supported tapering by the year-end, others contended that the labor market wasn’t strong enough to persuade reducing the pace of economic stimulating measures.

The dollar index, a measure on greenback’s performance vis-à-vis a basket of six major traded currencies, fell as low as 82.418, its lowest level since June 25 and also down nearly 2.8% from its three-year peak of 84.753, hit two sessions ago, showed a data provided by Reuters. The U.S. dollar index though recovered slightly and was at 83.005, at last check.

The Fed Chairman’s remarks were in sharp contrast to his earlier comments. In June Bernanke said that the quantitative easing could be tapered by the year-end as economic data was showing significant improvement.

Before yesterday’s remarks from Bernanke, the general perception was that the quantitative easing could be narrowed by September.








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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.

Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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