Greenback softer as Fed Chairman speaks

The greenback continued to trade on the back foot, weakening against all of its major counterparts with the exception of the Swiss franc. No significant economic data was released, however Fed Chairman Ben Bernanke delivered a speech and said that accommodative policies are still needed and noted that economic growth is ‘uneven’ and ‘frustratingly slow’. He indicated that he sees hiring accelerating and that growth is likely to pick up in the second half of this year. The dollar was softer with EUR/USD currently trading around 1.4685. The Q&A session is likely to provide further insight into future policy.

U.S. equities finished in negative territory for the fifth consecutive session. A late day slump as the Fed Chairman began speaking saw stocks close lower with the Dow Jones Industrial Average losing about -0.16% while the S&P declined by around -0.09%. Commodities were slightly firmer with gold, silver and oil up by nearly +0.04%, +0.74% and +0.29% respectively. U.S. 10-yr Treasury yields were higher throughout the day but dropped as Bernanke spoke, shedding about 2 bps to around 2.98%.

Due out of the Asia/Pacific session is a New Zealand QV house prices for May, Australia April home loans and investment lending as well as speeches by New Zealand Prime Minister Key and Finance Minister English. Japan is set to release trade balance figures for April, May bank lending and money stock data and the May Eco Watchers survey results.

Source: Forex.com

07.06.2011