In US trade, the euro’s fortunes were dictated by the words of Ben Bernanke who was speaking before the senate banking committee.
Stocks initially fell during Bernanke’s prepared testimony as the Fed Chairman provided no specific plans for boosting growth. The lack of any definitive stimulus measures saw the dollar index shoot higher and the euro plunge below 1.22 to a session low of 1.2189.
However, things quickly reversed course during ‘question and answer time’ when Bernanke said he was concerned about the economy, that inflation would not be a hindrance to providing more stimulus and that the Fed stood willing and able to enact further asset purchases particularly if the labour market didn’t improve. The QE3 dream was still alive and the markets rejoiced. Equities moved firmly into positive territory, gold pared its losses, the US dollar began to retreat and the euro pushed back up to where it started the session.
Having ended yesterday’s Australian session around the 1.2285 level, the euro fell to a low of 1.2189 before recovering to close US trade at 1.2294. Upon resuming for Asian trade, the euro is essentially unchanged.