Investing.com - The euro extended losses against the U.S. dollar on Wednesday, hitting a two-day low after Federal Reserve Chairman Ben Bernanke said the central bank was prepared to adjust the balance sheet “as appropriate” to support the economic recovery.
EUR/USD hit 1.3391 during U.S. morning trade, the pair’s lowest since Monday; the pair subsequently consolidated at 1.3400, shedding 0.42%.
The pair was likely to find support at 1.3388, Tuesday’s low and resistance at 1.3485, the session high and a 12-week high.
In testimony to the House Financial Services Committee in Washington, Bernanke said he expects growth this year to continue "at a pace close to or somewhat above the pace" in the second half of 2011 and added that the bank expects to support the economic recovery with its "highly accommodative" monetary policy.
Bernanke also said that European policymakers have recently implemented a number of measures to stabilize the region, but warned that “critical fiscal and financial challenges remain for the euro zone".
The remarks came after the U.S. Commerce Department reported that gross domestic product increased at a seasonally adjusted annual rate of 3.0% during the fourth quarter, up from a preliminary estimate of 2.8%.
Analysts had expected the second estimate of U.S. GDP to remain unchanged at 2.8%.
The report said the upward revision was due in part to stronger consumer spending and commercial construction data.
The euro slid against the greenback earlier after the European Central Bank's second long-term liquidity operation met with robust demand, bolstering demand for higher yielding assets at the expense of the single currency.
The ECB allotted EUR529 billion in three-year loans to European lenders, after receiving bids from 800 banks, significantly more than in the bank’s first long term refinancing operation late last year.
In December, the EBC issued EUR489 billion in three-year loans to 523 banks, averting a liquidity shortage in the euro zone’s banking system and easing pressure on the region’s bond markets.
The euro was lower against the pound and the yen, with EUR/GBP dropping 0.77% to hit 0.8398 and EUR/JPY slipping 0.13% to hit 108.14.
Earlier Wednesday, official data showed that consumer price inflation in the euro zone eased unexpectedly in January, rising by a seasonally adjusted 2.6%, down from a preliminary estimate of 2.7%.
Analysts had expected euro zone consumer prices to remain unchanged.
Elsewhere, Finland’s parliament endorsed Greece’s second bailout package, one day after Germany’s parliament approved the bailout by a comfortable margin.
EUR/USD hit 1.3391 during U.S. morning trade, the pair’s lowest since Monday; the pair subsequently consolidated at 1.3400, shedding 0.42%.
The pair was likely to find support at 1.3388, Tuesday’s low and resistance at 1.3485, the session high and a 12-week high.
In testimony to the House Financial Services Committee in Washington, Bernanke said he expects growth this year to continue "at a pace close to or somewhat above the pace" in the second half of 2011 and added that the bank expects to support the economic recovery with its "highly accommodative" monetary policy.
Bernanke also said that European policymakers have recently implemented a number of measures to stabilize the region, but warned that “critical fiscal and financial challenges remain for the euro zone".
The remarks came after the U.S. Commerce Department reported that gross domestic product increased at a seasonally adjusted annual rate of 3.0% during the fourth quarter, up from a preliminary estimate of 2.8%.
Analysts had expected the second estimate of U.S. GDP to remain unchanged at 2.8%.
The report said the upward revision was due in part to stronger consumer spending and commercial construction data.
The euro slid against the greenback earlier after the European Central Bank's second long-term liquidity operation met with robust demand, bolstering demand for higher yielding assets at the expense of the single currency.
The ECB allotted EUR529 billion in three-year loans to European lenders, after receiving bids from 800 banks, significantly more than in the bank’s first long term refinancing operation late last year.
In December, the EBC issued EUR489 billion in three-year loans to 523 banks, averting a liquidity shortage in the euro zone’s banking system and easing pressure on the region’s bond markets.
The euro was lower against the pound and the yen, with EUR/GBP dropping 0.77% to hit 0.8398 and EUR/JPY slipping 0.13% to hit 108.14.
Earlier Wednesday, official data showed that consumer price inflation in the euro zone eased unexpectedly in January, rising by a seasonally adjusted 2.6%, down from a preliminary estimate of 2.7%.
Analysts had expected euro zone consumer prices to remain unchanged.
Elsewhere, Finland’s parliament endorsed Greece’s second bailout package, one day after Germany’s parliament approved the bailout by a comfortable margin.