The euro declined by 0.43% to $1.224 against the US dollar after Ben Bernanke offered few clues as to whether the central bank was close to introducing monetary stimulus to boost the economy.
In his testimony to the Senate Banking Committee yesterday, Federal Reserve chairman Ben Bernanke said the economic recovery was being hampered by the ongoing eurozone debt crisis. Although Mr Bernanke failed to provide conclusive hints about QE3, he did say the Fed has at its disposal a range of tools, and was waiting to see if they would be required.
Investors who were hoping for more concrete evidence for QE were disappointed by the familiar tone. The US dollar rebounded following the news.
The euro is under pressure today as investors are wary before German policymakers vote tomorrow on Spanish aid. Eurozone finance ministers had agreed on a rescue package of up to €100 billion to the Spanish banks, and the German parliament is going to vote tomorrow to approve the Spanish aid package.