Forex Broker----Fed Chairman Ben Bernanke did not mention that Fed will adjust the current ultra-loose policy in the Congress testimony on Wednesday (July 21st). However, he stated that Fed would adapt further policies when necessary so as to achieve a full utilization of domestic production potentiality in the case of stable commodity prices.
Forex analysts explain that Bernanke only followed the view of the minutes of the Fed July conference released last week. The key point of his testimony lies in that Fed has already been prepared to take actions when the economy deteriorates further.
Bernanke’s pessimistic prediction to economy prompted risk currencies to call back, among which the euro retraced most sharply. The euro decrease against the dollar and against the Japanese yen was both around 1%. Apart from the overall changes of risk fears, Amelia Bourdeau, forex strategist from UBS explained that, forex investors had begun to “lower their expectations”to European banking stress test, which also stroke the performance of the euro.
EUR/USD rose to 10-week high on Tuesday, above1.3000, because dealers bet that the majority of the 91 banks that are involved in European banking stress test would pass through. The result will be out on Friday (July 23rd).
European decision makers have been confident that local banks will pass the test, but forex investors become more and more worried on whether the result and the stress testing standard are dependable.
According to BNP, German Handelsblatt reported that the portfolio managers believe that the test is low in reliability.
8:11 GMT, the dollar index reported 83.24. EUR/USD reported 1.2767/68. GBP/USD reported 1.5182/87. USD/ JPY reported 86.85/90. AUD/ USD reported 0.8773/76. NZD/ USD reported 0.7117/20---Forex Broker: Ikonfx
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