The US Dollar retreated from its earlier gains and instead took a tumble against Sterling and the Euro after Federal Reserve Chairman Ben Bernanke told Congress that the Central Bank’s monetary easing programme “is by no means on a preset course”.
Bernanke said in his testimony: “If the outlook for employment were to become relatively less favourable, if inflation did not appear to be moving back toward 2%, or if financial conditions which have tightened recently were judged to be insufficiently accommodating to allow us to attain our mandated objectives, the current pace of purchases could be maintained no longer.”
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6575
The comments were expected by most economists that believed that the Fed Chairman would make a neutral testimony as he tries to balance the market’s reaction. If he announced immediate tapering then commodity and emerging currencies would be hammered whilst the US Dollar would soar, likewise if he took the opposite stance then the Dollar would soften.
“There is something in these comments for everybody,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington. “Bernanke has done a good job of leaving himself plenty of manoeuvre room in terms of policy.”
Bernanke satisfied both sides by saying that the pace of asset purchases could be reduced quicker if economic conditions in the United States improved at a faster than expected pace. On the other hand he said he said that the current pace could be maintained for a longer period if the labour market softened or if inflation did not rise toward its 2% target. Basically he kicked the can down the road.
Current US Dollar (USD) Exchange Rates
< Down > Up
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6575 <
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7602 <
The US Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.086 –
The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 99.6689 >
The US Dollar/Canadian Dollar Exchange Rate is currently in the region of: 1.0392<
The Pound Sterling/ US Dollar Exchange Rate is currently in the region of: 1.5207 >
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3153 >
The Canadian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9622 >
The New Zealand Dollar/US Dollar Exchange Rate is currently in the region of: 0.7856 <
(Correct as of 14:30 pm GMT)
Comments are closed.