Investing.com - The dollar fell against the world's major currencies on Tuesday, stabilizing after plunging in wake of Federal Reserve Chairman Ben Bernanke's suggestions that continued loose monetary policies may be needed to boost employment and improve the economy.
In Asian trading on Tuesday, the euro was up against the greenback, with EUR/USD rising 0.04% and trading at 1.3364.
In the U.S., Federal Chairman Bernanke suggested loose monetary policies will need to continue in order to fuel consumer and business demand in a way to make lasting improvement to the labor market.
While unemployment rates are falling, businesses are hiring mainly to replace positions made vacant during recession-time layoffs, and aren't ramping up to expand.
"Further significant improvements in the unemployment rate will likely require a more-rapid expansion of production and demand from consumers and businesses, a process that can be supported by continued accommodative policies," Bernanke told the National Association for Business Economics Annual Conference, Washington, D.C., according to a copy of his speech.
The markets interpreted Bernanke's comments to mean a third round of quantitative easing may be needed to jolt the economy.
The Fed has already rolled out two rounds of quantitative easing since the downturn, snapping up $2.3 trillion in mortgage-backed securities and Treasury bonds from banks with the aim of injecting liquidity into the system to ensure price stability and promote hiring.
Such a move weakens the dollar, and Bernanke's comments kept the greenback sliding in Asian trading early Tuesday.
The greenback saw further selling as the euro gained favor among investors after the Ifo Institute said its March index of German business confidence rose to 109.8 from a revised reading of 109.7 in February.
Analysts had expected the index to stay at 109.7 this month.
Weak housing data in the U.S. also sent the greenback falling.
The National Association of Realtors reported that its pending home sales index fell by 0.5% in February, much weaker than expectations for a 1.0% gain.
Pending home sales rose by 2.0% in January.
Similar indicators for the housing sector have slightly disappointed markets for February.
The dollar did regain its strength against some currencies after testing support levels Tuesday.
Some Federal Reserve governors have said they opposed easing at this time, preferring instead to wait and see how the economy does on its own two feet without Fed intervention.
The greenback, meanwhile, was up against the pound, with GBP/USD down 0.02% and trading at 1.5968.
The greenback was up against the yen, with USD/JPY trading up 0.07% at 82.89, and flat against the Swiss franc, with USD/CHF trading at 0.9030.
The greenback was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.03% at 0.9912, AUD/USD down 0.05% at 1.0528 and NZD/USD up 0.02% at 0.8234.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was flat at 79.10.
Later Tuesday, Fed Chairman Bernanke is due to appear in public again, as is Federal Reserve Bank of Dallas President Richard Fisher.
More housing data is due out, with the latest S&P/Case-Shiller House Price Index scheduled for release.
Markets will also keep a sharp eye on the U.S. Conference Board's consumer confidence index.
In Asian trading on Tuesday, the euro was up against the greenback, with EUR/USD rising 0.04% and trading at 1.3364.
In the U.S., Federal Chairman Bernanke suggested loose monetary policies will need to continue in order to fuel consumer and business demand in a way to make lasting improvement to the labor market.
While unemployment rates are falling, businesses are hiring mainly to replace positions made vacant during recession-time layoffs, and aren't ramping up to expand.
"Further significant improvements in the unemployment rate will likely require a more-rapid expansion of production and demand from consumers and businesses, a process that can be supported by continued accommodative policies," Bernanke told the National Association for Business Economics Annual Conference, Washington, D.C., according to a copy of his speech.
The markets interpreted Bernanke's comments to mean a third round of quantitative easing may be needed to jolt the economy.
The Fed has already rolled out two rounds of quantitative easing since the downturn, snapping up $2.3 trillion in mortgage-backed securities and Treasury bonds from banks with the aim of injecting liquidity into the system to ensure price stability and promote hiring.
Such a move weakens the dollar, and Bernanke's comments kept the greenback sliding in Asian trading early Tuesday.
The greenback saw further selling as the euro gained favor among investors after the Ifo Institute said its March index of German business confidence rose to 109.8 from a revised reading of 109.7 in February.
Analysts had expected the index to stay at 109.7 this month.
Weak housing data in the U.S. also sent the greenback falling.
The National Association of Realtors reported that its pending home sales index fell by 0.5% in February, much weaker than expectations for a 1.0% gain.
Pending home sales rose by 2.0% in January.
Similar indicators for the housing sector have slightly disappointed markets for February.
The dollar did regain its strength against some currencies after testing support levels Tuesday.
Some Federal Reserve governors have said they opposed easing at this time, preferring instead to wait and see how the economy does on its own two feet without Fed intervention.
The greenback, meanwhile, was up against the pound, with GBP/USD down 0.02% and trading at 1.5968.
The greenback was up against the yen, with USD/JPY trading up 0.07% at 82.89, and flat against the Swiss franc, with USD/CHF trading at 0.9030.
The greenback was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.03% at 0.9912, AUD/USD down 0.05% at 1.0528 and NZD/USD up 0.02% at 0.8234.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was flat at 79.10.
Later Tuesday, Fed Chairman Bernanke is due to appear in public again, as is Federal Reserve Bank of Dallas President Richard Fisher.
More housing data is due out, with the latest S&P/Case-Shiller House Price Index scheduled for release.
Markets will also keep a sharp eye on the U.S. Conference Board's consumer confidence index.