Forex - Dollar reverses gains made on Bernanke comments

Published 02/29/2012, 09:35 PM
Updated 02/29/2012, 09:39 PM
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Investing.com - The dollar fell against the world's major currencies Thursday, relaxing a bit after posting strong gains when Federal Reserve Chairman Ben Bernanke suggested the U.S. monetary authority had no plans to roll out fresh stimulus measures at present.
 
In early Asian trading on Thursday, the euro was up against the greenback, with EUR/USD gaining 0.12% and trading at 1.3341.

In the U.S. Fed Chairman Ben Bernanke told lawmakers the U.S. Central Bank has no concrete plans to unveil a third round of quantitative easing, which are asset purchases from banks designed to lower interest rates and stimulate the economy.

The Fed has rolled out two such rounds in recent years, and many marketwatchers were expecting a third round for 2012, although Bernanke said he had no plans for such at this time.

Since quantitative easing weakens the dollar, the greenback soared earlier in U.S. and European trading although it tempered in Asian trading on Thursday.

Stronger-than-expected gross domestic product rates further stabilized the greenback.

The U.S. Commerce Department reported that gross domestic product rose 3.0% during the fourth quarter, up from a preliminary estimate of 2.8%.

Meanwhile, the dollar was down against the pound, with Cable up 0.07% and trading at 1.5926.

The greenback was down 0.04% against the yen, with USD/JPY trading at 81.12, and down against the Swiss franc, with USD/CHF down 0.07% and trading at 0.9038.

The greenback was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.16% at 0.9884, AUD/USD up 0.20% at 1.0753 and NZD/USD up 0.25% at 0.8362.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.07% at 78.79.

The U.S. is to release government data on initial jobless claims as well as personal consumption expenditures and personal spending.

Meanwhile, the Institute for Supply Management is to unveil its latest index on manufacturing activity.

In addition, Fed Chairman Bernanke is due to testify for a second day before the Senate Banking Committee.





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