The US Dollar dipped on Friday after employment data for the world’s largest economy came in below expectations, and the safe-haven currency recorded additional declines yesterday as ongoing fiscal concerns in the US were highlighted by Ben Bernanke, Chairman of the Federal Reserve.
The US Dollar Exchange Rate was trading in the region of 0.7676 against the Euro as of 09:46 pm GMT
While speaking at the Atlanta Fed Conference in Georgia, Bernanke stated: ‘Today the economy is significantly stronger than it was four years ago, although conditions are clearly still far from where we would like them to be’.
Last month US policy makers made it clear that the fiscal stimulus methods currently being employed would remain in place until the labour market had significantly improved. Given the disappointing employment data published on Friday it seems likely that the Fed will continue purchasing 85 billion Dollars of bonds a month for the foreseeable future.
In the wake of Bernanke’s remarks the US Dollar slid against several of its main currency rivals, declining for a fifth day against the Euro and dropping from a four-year high against the Yen.
According to currency strategist Richard Grace; ‘We’re seeing broad-based Dollar weakness based on Bernanke’s comments. Maintaining open ended-quantitative easing is going to prevent the Dollar from rising.’
As regards USD/JPY, one forex expert noted: ‘We’ve seen some US Dollar weaknesses across the board today, and that’s contributed to Dollar/Yen coming off the boil. We’ll see Dollar/Yen trade at 100 in the near term, though there may be some consolidation before a move higher.’
Yesterday the Yen fell to 99.66, the weakest level recorded since May 2009. Today the Asian currency has modestly rebounded from this four-year low, climbing to 98.95.
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