EU Morning Report – Bernanke’s rare comments support USD, market awaiting action

By @ibtimes on

Bernanke's rare comments support the USD, market awaiting action

  • On behalf of the Fed, Bernanke said they are monitoring currency markets closely and will conduct policy in a way that will help ensure that the dollar is strong, on Monday.  In the meantime, the Fed still expects to keep rates near zero for an extended period based on its forecasts of low levels of resource utilization, subdued inflation trends and stable inflation expectations.
  • The Chairman's remarks boosted the greenback, but it was not long before the dollar reversed gains as traders questioned whether Bernanke was prepared to go beyond talking in support of the currency.
  • In Asia, stocks and commodities decline from a three week high as Bernanke forecasted significant challenges ahead in the revival of the U.S. economy, saying it will be restrained by the headwinds of reduced bank lending and a weak labor market.
  • US Retail Sales beating market expectation and the 21-member APEC's pledge to continue their efforts in reviving the global economy helped push Gold prices to new record high at $1144.20 and Crude oil to an intraday-high of $79.43 a barrel.

Currency to watch out for: EURUSD & GBPUSD

  • The EURUSD pivot point is at 1.5000 with a preference to enter into short positions below 1.5000
  • The GBPUSD pivot point is at 1.6875 with a preference to enter into short positions at 1.6865

Today's calendar and market movers:

  • UK CPI month on month expected to rise to 0.1%
  • US PPI month on month expected to rise to 0.5%
  • US Industrial Output month on month expected to drop to 0.4%

Stocks:

  • U.S. equities finished higher on Monday after investor sentiment rose following APEC's commitment to maintain stimulus spending and encouraging U.S. Retail Sales.  At the closing bell, the Dow closed up 1.33%, the S&P up 1.45% and the NASDAQ up 1.06%.
  •  As of 07:00 GMT the Nikkei is trading at -0.63% and the Hang Seng at -0.56%
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