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US Dollar Plunges on Bernanke Remarks

July 11, 2013 at 12:49 by Miranda Marquit

A sheet of US 100-dollar bills up to the horizonUS dollar is heading lower today, dropping as the latest economy related comments from Federal Reserve Chair Ben Bernanke put recent dollar gains into perspective. Dollar has given back all its recent gains against the euro, and is down against its major counterparts as a result.

Recently, with all of the talk of potential tapering of asset purchases, the US dollar has been showing a decent amount of strength. However, yesterday Federal Reserve Chair Ben Bernanke changed all of that in just a few minutes.

During a question and answer session about economic policy, Bernanke adopted a dovish tone (at least in comparison to what he’s been saying lately), and insisted that tapering isn’t going to happen anytime soon. He said that 6.5 per cent unemployment remains the trigger for a reduction in asset purchases, and that the US economy isn’t there yet.

The news that tapering could still be a while off sent the US dollar plunging. It’s still losing ground today, with the euro back through the 1.30 level, and with other major currencies gaining ground as well.

At 12:46 GMT EUR/USD is higher, up to 1.3023 from the open at 1.2977. GBP/USD is also higher, up to 1.5085 from the open at 1.5015. USD/JPY is lower, down to 99.3345 from the open at 99.6785.

If you have any questions, comments, or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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