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FOREX-Majors steady, US GDP to take centre stage

Published 07/26/2009, 08:58 PM
Updated 07/26/2009, 09:00 PM

* Majors broadly steady in early trade, although yen firms

* Focus on U.S. Q2 GDP at end of week

* Bernanke: H2 growth won't be enough to bring down jobless

By Charlotte Cooper

TOKYO, July 27 (Reuters) - Major currencies held steady in early Asian trade on Monday with the market looking ahead to U.S. data later in the week to gauge the health of the world's biggest economy.

Federal Reserve Chairman Ben Bernanke said in comments at a forum with TV network PBS that growth in the second half of the year would not be enough to bring down the rate of unemployment but he hoped the economy would get going again sometime next year. and

He said the Fed expected that in the next couple of years inflation would be quite low because of slack in the economy but if the economy began to show strength, the central bank would have to gradually unwind its special programmes.

U.S. gross domestic product, due on Friday, is expected to show the world's largest economy contracted for a fourth consecutive quarter in the second quarter, the first time that has happened in records dating to 1947.

Forecasts are for a contraction at an annual rate of 1.5 percent, less than an annual pace of decline in the first quarter of 5.5 percent, and some analysts expect it to be the last negative quarter of this recession.

"Probably the market's view is that what's good for the U.S. is good for risk more broadly," said Sue Trinh, senior currency strategist at RBC Capital Markets in Sydney.

The dollar has tended to suffer on upbeat U.S. economic news in recent months as the global economic crisis has eased, with investors gaining some confidence to move funds into assets they expect to benefit first from a pull-up from recession.

The euro was little changed from levels traded late on Friday. It edged down 0.1 percent to $1.4185, not far off a seven-week high of $1.4292 set last week.

The dollar index, a gauge of its performance against six major currencies, edged up a little from a seven-week low forged last week, and the greenback was steady on the day at 94.86 yen.

The euro slipped 0.1 percent to 134.62 yen while other yen crosses also eased slightly as traders trimmed long positions created last week in the likes of the Australian dollar. (Editing by Hugh Lawson)

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