Dollar stronger after Bernanke’s comments

The euro dropped sharply yesterday as the European Central Bank’s LTRO auction to inject money into the eurozone’s financial system failed to support the single currency. 530 billion euro of cheap loans was offered to the European Banks on Wednesday easing fears about a liquidity crunch in Europe. Versus the Japanese yen, the single currency edged lower to 107.87 from 108.72. Eyes now turn to the EU summit two-day meeting starting on Thursday where talks are expected to focus on growth policies, Greek PSI, the eurozone firewall and the Irish referendum. Versus the greenback, the single currency declined to 1.3306 from 1.3485.

The US dollar strengthened against a basket of currencies yesterday following a speech by Federal Reserve Chairman Ben Bernanke. He acknowledged improvements in the US economy and that the unemployment rate was falling faster than expected. Bernanke’s comments supported the dollar as expectations for a third round of quantitative easing by the Fed started to fade. Against the Japanese yen, the dollar rose to 81.39 from 80.24. Focus now turns to the US Initial Jobless Claims and ISM Manufacturing figures and any positive signs may add to speculation that the US economy is recovering.

The Australian dollar slid against the greenback yesterday falling from a 3-week high after Bernanke’s words gave the dollar a boost. The pair fell to 1.0714 from 1.0855, a 1.3% drop.

Oil prices dipped to 104.83 dollars a barrel from 107.41 but5 later recovered to 107.23. Gold plummeted to 1686.11 dollars an ounce from 1790.81, a 5.8% decline. Gold rose to 1330.62 euro an ounce from 1325.68. Silver dropped to 33.87 dollars an ounce from 37.48.

 

OutlookPivotPreference1Sentiment2
EURUSD1.3390SHORT @ 1.338051% of deals buy EUR
USDJPY80.70LONG @ 80.7530% of deals buy USD
GBPUSD1.5895LONG @ 1.590553% of deals buy GBP
AUDUSD1.0800SHORT @ 1.080032% of deals buy AUD
GOLD1732.00SHORT @ 1732.0068% of deals buy GOLD
OIL107.50SHORT @ 107.5036% of deals buy OIL
1 data generated by Trading Central, 2 data obtained from easy-forex Inside Viewer
CalendarCurrencyTime (GMT)EventForecast
EUR10:00Unemployment Rate10.4%
EUR13:30Initial Jobless Rate351K
USD15:00ISM Manufacturing54.5
EquitiesEUROPEUSASIA3
FTSE 100-0.95%?S&P 500-0.47%?NIKKEI-0.16%?
DAX-0.46%?DJIA-0.41%?HIS-1.04%?
CAC-0.04%?NASDAQ-0.67%?CSI 3000.28%
3 at the time of writing